The red overlay icon is shown for any directory containing a committed, clean file with non-ascii characters in its name (such as the Danish letter 'æ'). The icon on the file itself is green, as it should be, however the icon for parent directory is red. The command "hg stat" returns nothing, i.e. clean state. The Workbench also shows no changes in the Working Directory. In other words, only the directory icon is wrong. This is TortoiseHG 2.0.3, and XP/SP3.
Please note that this bug is not related to any issues there may be with THG and the fixutf8 extensions - fixutf8 was not enabled here.