that's because the binary distribution doesn't ship with mercurial... if 
you fiddle with source code (and need version control) you're kinda 
"required" to use the source code distribution.

On Monday, May 20, 2013 5:34:20 PM UTC+2, tim spear wrote:
>
> I had the same error with the web2py.exe version of web2py
>
> I found the versioning button works ok though from the python source 
> version (see 
> http://ochiba77.blogspot.co.uk/2011/10/how-to-install-web2py-from-source.html
>  )
>
>
>
> On Tuesday, August 28, 2012 4:59:25 PM UTC+1, Sergi Pons Freixes wrote:
>>
>> Hi all,
>>
>> I have mercurial installed:
>>
>> # dpkg -l |grep mercurial                                                    
>> ii  mercurial                          1.6.4-1                      scalable 
>> distributed version control system                                           
>>                                               
>> ii  mercurial-common                   1.6.4-1                      scalable 
>> distributed version control system (common files)
>>
>> And the Versioning button is shown on the admin interface, but when I click 
>> on it I got the message: "Sorry, could not find mercurial installed". 
>> According to the book, it should find it automatically. Which step I am 
>> missing?
>>
>>
>>

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