When selecting the volume in the installation program it says "You cannot install Merucrial on this volume. Mercurial requires Apple Python 2.6". I tried installing the latest version of Python from python.org but no luck.
Most likely the python you installed from python.org is installed but the path it is in is not where mercurial for Mac is looking. Try the command
The best way to get python 2.6 on MAC in a place that MAC apps can find it is