Well MacHg is looking for the Kdiff3 application.
You can get it from eg:
http://downloads.sourceforge.net/kdiff3/kdiff3-0.9.95-Mac-Universal-2.zip
This is the thing which you need to install on your machine, run it once and you should be good to go...
Cheers,
Jas
Ok. Well... Everything at /usr/local/bin should really be a unix tool or a unix tool which launches an application.
So where is the application located, and then look at the binary within that and maybe try setting Other in the MacHg > Mercurial preferences.
One other question, can you get this going without MacHg in the picture. Ie get it going from the command line version of Mercurial?
Cheers,
Jas
victor-mbp<1:~ victorhooi$ file /usr/local/bin/kdiff3
/usr/local/bin/kdiff3: Mach-O 64-bit executable x86_64