The genignore command does not correctly handle svn:ignore properties where there are blank lines between the entries. The generated .hgignore file treats each blank line as an entry consisting of the current directory. This results in HgSubversion generating a .hgignore that ignores the entire directory rather than just the specified files, which can result in major confusion for the user. HgSubversion should simply ignore blank lines in svn:ignore properties.
Example: The following is an svn:ignore property on a directory named www/app/:
fwk-classes.js app-classes-min.js fwk-classes-min.js ext-classes.js ext-classes-min.js app-classes.js
This results in the following being added to the .hgignore file:
www/app/fwk-classes.js www/app/ www/app/app-classes-min.js www/app/ www/app/fwk-classes-min.js www/app/ www/app/ext-classes.js www/app/ www/app/ext-classes-min.js www/app/ www/app/app-classes.js
As a side-note, I'm told that certain versions of a Subversion plugin for Eclipse are responsible for generating properties like this.