--- a/mercurial/util.py	Thu Dec 03 11:06:44 2009 +0100
+++ b/mercurial/util.py	Thu Dec 03 11:06:55 2009 +0100
@@ -1197,7 +1197,19 @@
     if path.startswith(sc):
         path = path[len(sc):]
         if path.startswith('//'):
-            path = path[2:]
+            if scheme == 'file':
+                i = path.find('/', 2)
+                if i == -1:
+                    return ''
+                # On Windows, absolute paths are rooted at the current drive
+                # root. On POSIX they are rooted at the file system root.
+                if os.name == 'nt':
+                    droot = os.path.splitdrive(os.getcwd())[0] + '/'
+                    path = os.path.join(droot, path[i+1:])
+                else:
+                    path = path[i:]
+            else:
+                path = path[2:]
     return path
 
 def uirepr(s):

--- a/tests/test-clone	Thu Dec 03 11:06:44 2009 +0100
+++ b/tests/test-clone	Thu Dec 03 11:06:55 2009 +0100
@@ -44,10 +44,10 @@
 hg cat a
 
 echo
-echo % "check that we drop the file:// from the path before"
+echo % "check that we drop the file: from the path before"
 echo % "writing the .hgrc"
 cd ../..
-hg clone file://a e
+hg clone file:a e
 grep 'file:' e/.hg/hgrc
 
 echo

--- a/tests/test-clone.out	Thu Dec 03 11:06:44 2009 +0100
+++ b/tests/test-clone.out	Thu Dec 03 11:06:55 2009 +0100
@@ -29,7 +29,7 @@
 2 files updated, 0 files merged, 0 files removed, 0 files unresolved
 a
 
-% check that we drop the file:// from the path before
+% check that we drop the file: from the path before
 % writing the .hgrc
 updating to branch default
 2 files updated, 0 files merged, 0 files removed, 0 files unresolved

--- a/tests/test-pull	Thu Dec 03 11:06:44 2009 +0100
+++ b/tests/test-pull	Thu Dec 03 11:06:55 2009 +0100
@@ -24,3 +24,8 @@
 hg init empty
 cd empty
 hg pull -u ../test
+
+echo % test file: uri handling
+hg pull -q file://../test-doesnt-exist
+hg pull -q file:../test
+hg pull -q file://foobar`pwd`/../test

--- a/tests/test-pull.out	Thu Dec 03 11:06:44 2009 +0100
+++ b/tests/test-pull.out	Thu Dec 03 11:06:55 2009 +0100
@@ -30,3 +30,5 @@
 adding file changes
 added 1 changesets with 1 changes to 1 files
 1 files updated, 0 files merged, 0 files removed, 0 files unresolved
+% test file: uri handling
+abort: repository /test-doesnt-exist not found!