I finally activated mercurial on puppy wary 511.
1. install python 2.6.pet
2. install mercurial 1.0.1 deb of debian lenny
3. download and extract .py files from .tgz, the debian web site
4. set PYTHON_PATH to extracted .py folder
5. copy .so files included in deb to extracted .py folder
but I'm not sure it works even when using push command. I just checked with "hg clone"