help: it is 'file://localhost/', not 'file://local/'
The documentation has apparently always been wrong.
This is a rudimentary test of the CGI files as of d74fc8dec2b4.
$ hg init test
$ cat >hgweb.cgi <<HGWEB
> #!/usr/bin/env python
> #
> # An example CGI script to use hgweb, edit as necessary
>
> import cgitb
> cgitb.enable()
>
> from mercurial import demandimport; demandimport.enable()
> from mercurial.hgweb import hgweb
> from mercurial.hgweb import wsgicgi
>
> application = hgweb("test", "Empty test repository")
> wsgicgi.launch(application)
> HGWEB
$ chmod 755 hgweb.cgi
$ cat >hgweb.config <<HGWEBDIRCONF
> [paths]
> test = test
> HGWEBDIRCONF
$ cat >hgwebdir.cgi <<HGWEBDIR
> #!/usr/bin/env python
> #
> # An example CGI script to export multiple hgweb repos, edit as necessary
>
> import cgitb
> cgitb.enable()
>
> from mercurial import demandimport; demandimport.enable()
> from mercurial.hgweb import hgwebdir
> from mercurial.hgweb import wsgicgi
>
> application = hgwebdir("hgweb.config")
> wsgicgi.launch(application)
> HGWEBDIR
$ chmod 755 hgwebdir.cgi
$ . "$TESTDIR/cgienv"
$ python hgweb.cgi > page1
$ python hgwebdir.cgi > page2
$ PATH_INFO="/test/"
$ PATH_TRANSLATED="/var/something/test.cgi"
$ REQUEST_URI="/test/test/"
$ SCRIPT_URI="http://hg.omnifarious.org/test/test/"
$ SCRIPT_URL="/test/test/"
$ python hgwebdir.cgi > page3
$ grep -i error page1 page2 page3
[1]