diff -r 245a67fe2574 -r b203a95fe68b mercurial/localrepo.py
--- a/mercurial/localrepo.py	Tue May 11 16:28:09 2010 -0500
+++ b/mercurial/localrepo.py	Tue May 11 17:03:44 2010 -0500
@@ -25,7 +25,7 @@
 
     def __init__(self, baseui, path=None, create=0):
         repo.repository.__init__(self)
-        self.root = os.path.realpath(path)
+        self.root = os.path.realpath(util.expandpath(path))
         self.path = os.path.join(self.root, ".hg")
         self.origroot = path
         self.opener = util.opener(self.path)