This seems to be a broken link in the README file :
hg clone http://hg.serpentine.com/mercurial/book
I am afraid the repository has simply moved.
See the "Clone" link on the left side of the Bitbucket interface. It will give you options for HTTPS and SSH clones (hg clone https://bitbucket.org/bos/hgbook or hg clone ssh://email@example.com/bos/hgbook).
As far as I can understand, the repo at
refers to the "definitive copy of the source tree". I thought it was a link to the sources that generated the book sold at O'Reilly.
I did find the clone statement previously.
I fact, I forked the repo and submitted a pull request for similar fixes in the doc.