Configure TortoiseHg
[ui]
merge = diffmerge

[extensions]
hgext.extdiff =

[extdiff]
cmd.diffmerge = <path-to-diffmerge-executable>

[merge-tools]
diffmerge.executable = <path-to-diffmerge-executable>
diffmerge.args = --result=$output -t1="Local Version" -t2=$output -t3="Other Version" --caption=$output  $local $base $other
diffmerge.binary = False
diffmerge.symlinks = False
diffmerge.gui = True
diffmerge.premerge = True
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