I use Vagrant and virtualbox for developing inside ubuntu on OSX. I have a couple of mercurial (hg) checkouts and they were giving me grief:
$ hg up Not trusting file /some-repo/.hg/hgrc from untrusted user 501, group dialout
The .hg/hgrc file contains the remote repo URL, so pulling even won't work. The problem is apparently the interaction between virtualbox and OSX if you use NFS to mount part of your OSX's harddisk.
The solution/workaround is quite simple. Tell mercurial to trust that 501 user in your ~/.hgrc:
.... [trusted] users = 501
Now it works!