--- a/mercurial/hg.py	Wed Feb 13 16:46:43 2008 +0100
+++ b/mercurial/hg.py	Wed Feb 13 18:37:38 2008 -0200
@@ -105,8 +105,8 @@
     destination is local repository
     """
 
-    origsource = source
-    source, rev, checkout = parseurl(ui.expandpath(source), rev)
+    origsource = ui.expandpath(source)
+    source, rev, checkout = parseurl(origsource, rev)
 
     if isinstance(source, str):
         src_repo = repository(ui, source)

--- a/tests/test-clone	Wed Feb 13 16:46:43 2008 +0100
+++ b/tests/test-clone	Wed Feb 13 18:37:38 2008 -0200
@@ -32,4 +32,8 @@
 hg clone file://a e
 grep 'file:' e/.hg/hgrc
 
+# check that path aliases are expanded
+hg clone -q -U --config 'paths.foobar=a#0' foobar f
+hg -R f showconfig paths.default | sed -e 's,.*/,,'
+
 exit 0

--- a/tests/test-clone.out	Wed Feb 13 16:46:43 2008 +0100
+++ b/tests/test-clone.out	Wed Feb 13 18:37:38 2008 -0200
@@ -15,3 +15,4 @@
 1 files updated, 0 files merged, 0 files removed, 0 files unresolved
 a
 1 files updated, 0 files merged, 0 files removed, 0 files unresolved
+a#0