diff -r 97f6d2a02c1f -r 5593ff6d1e5a mercurial/hg.py
--- a/mercurial/hg.py	Fri May 28 17:28:34 2010 +0200
+++ b/mercurial/hg.py	Fri May 28 17:28:34 2010 +0200
@@ -277,6 +277,7 @@
                                      % dest)
                 raise
 
+            hardlink = None
             for f in src_repo.store.copylist():
                 src = os.path.join(src_repo.sharedpath, f)
                 dst = os.path.join(dest_path, f)
@@ -287,7 +288,7 @@
                     if dst.endswith('data'):
                         # lock to avoid premature writing to the target
                         dest_lock = lock.lock(os.path.join(dstbase, "lock"))
-                    util.copyfiles(src, dst)
+                    hardlink = util.copyfiles(src, dst, hardlink)
 
             # we need to re-init the repo after manually copying the data
             # into it