--- a/mercurial/dirstate.py	Thu Apr 13 17:11:04 2006 -0700
+++ b/mercurial/dirstate.py	Thu Apr 13 17:11:35 2006 -0700
@@ -342,7 +342,16 @@
                 names.sort()
                 # nd is the top of the repository dir tree
                 nd = util.normpath(top[len(self.root) + 1:])
-                if nd == '.': nd = ''
+                if nd == '.':
+                    nd = ''
+                else:
+                    # do not recurse into a repo contained in this
+                    # one. use bisect to find .hg directory so speed
+                    # is good on big directory.
+                    hg = bisect.bisect_left(names, '.hg')
+                    if hg < len(names) and names[hg] == '.hg':
+                        if os.path.isdir(os.path.join(top, '.hg')):
+                            continue
                 for f in names:
                     np = util.pconvert(os.path.join(nd, f))
                     if seen(np):

--- a/mercurial/util.py	Thu Apr 13 17:11:04 2006 -0700
+++ b/mercurial/util.py	Thu Apr 13 17:11:35 2006 -0700
@@ -373,8 +373,10 @@
     """unlink and remove the directory if it is empty"""
     os.unlink(f)
     # try removing directories that might now be empty
-    try: os.removedirs(os.path.dirname(f))
-    except: pass
+    try:
+        os.removedirs(os.path.dirname(f))
+    except OSError:
+        pass
 
 def copyfiles(src, dst, hardlink=None):
     """Copy a directory tree using hardlinks if possible"""

--- a/tests/run-tests	Thu Apr 13 17:11:04 2006 -0700
+++ b/tests/run-tests	Thu Apr 13 17:11:35 2006 -0700
@@ -24,6 +24,16 @@
 HGMERGE=true; export HGMERGE
 HGUSER="test"; export HGUSER
 HGRCPATH=""; export HGRCPATH
+OS=`uname`
+
+case "$OS" in
+  HP-UX|SunOS)
+    DIFFOPTS=
+    ;;
+  *)
+    DIFFOPTS=-u
+    ;;
+esac
 
 if [ `echo -n HG` = "-n HG" ]
 then
@@ -118,13 +128,13 @@
 	cat "$ERR"
 	fail=1
     elif [ -r "$OUTOK" ]; then
-	if diff -u "$OUTOK" "$OUT" > /dev/null; then
+	if diff $DIFFOPTS "$OUTOK" "$OUT" > /dev/null; then
 	    : no differences
 	else
 	    cp "$OUT" "$ERR"
 	    echo
 	    echo "$1 output changed:"
-	    diff -u "$OUTOK" "$ERR" || true
+	    diff $DIFFOPTS "$OUTOK" "$ERR" || true
 	    fail=1
 	fi
     fi

--- /dev/null	Thu Jan 01 00:00:00 1970 +0000
+++ b/tests/test-nested-repo	Thu Apr 13 17:11:35 2006 -0700
@@ -0,0 +1,19 @@
+#!/bin/sh
+
+hg init a
+cd a
+hg init b
+echo x > b/x
+echo '# should print nothing'
+hg st
+echo '# should print ? b/x'
+hg st b/x
+
+hg add b/x
+
+echo '# should print A b/x'
+hg st
+echo '# should forget b/x'
+hg forget
+echo '# should print nothing'
+hg st b

--- /dev/null	Thu Jan 01 00:00:00 1970 +0000
+++ b/tests/test-nested-repo.out	Thu Apr 13 17:11:35 2006 -0700
@@ -0,0 +1,8 @@
+# should print nothing
+# should print ? b/x
+? b/x
+# should print A b/x
+A b/x
+# should forget b/x
+forgetting b/x
+# should print nothing