Seems like it would be better if you did commit followed by merge. I’m a little surprised update’ing is even allowed when your working copy has changes. Is allowing updates in such cases to avoid having commits that have two parents, which result from a merge?
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Mercurial encourages recording all the history of a project. If you’ve done some work in your working directory, why not to commit these changes providing a meaningful description of your results as a commit message and then merge your results into the main branch? It will be more clear for other people to see in two separate changesets what you have made as your normal work and what you have made just for resolving merge conflicts.
Usually an extra merge changeset is OK, but sometimes you just want to rebase your current changes on top of the main branch before committing them. You might take a look at the rebase extension. The new
hg rebasecommand allows you to rebase already committed changeses.