1. Local repository has been created by cloning remote repo.

2. Right click -> Refactor -> Move  to new folder.
Enter new location. Move is successful.

3. Team -> Synchronize for the project.
Error occurs:  Process start failed: C:\old_location\hg -y status -marduc
Cannot run program "C:\HgExecutableFolder\hg.exe" (in directory "C:\old_location"): CreateProcess error=267, The directory name is invalid

Expected:
MercurialEclipse should use the repository from new location.

Additional:
There may be other issues that don't work neither. Maybe shelving, unshelving  etc. that depends on location and writes it down somewhere.

MercurialEclipse version 1.7.1 Eclipse: Helios JEE, OS: XP