As of 0.9.4, when adding a symbolic link Mercurial keeps track of the link itself, and not the file or directories it points to. However, there are cases when it is desirable to keep track of the files pointed to by the symbolic link.
How can I force Mercurial to treat the symbolic link to a directory as a regular directory?
I don't think there's a way to do this when you're working with directories.
If you're working with mercurial 1.3 or later you could try using the new subrepo support, that will let you have a repo track stuff ourside of it on the local disk, but it's not as seamless as a link would have been.
I was surprised when I found this too, but it seems to be a feature that the Mercurial team don't want to change for security reasons.
I'm planning to get around it by using rsync to update the local copy of the directory before committing, from my makefile. This isn't a great solution but my directory is quite small so it should be OK.
Under linux you can use
mount --bind sourcepath targetpath
instead of symbolic links and mercurial will treat target as usual directory (tested on openSUSE 11.2 with Mercurial 1.3.1)