I am using Mercurial SCM over a LAN using a normal shared folder instead of http and i'm having a problem getting the auto update hook to run.

I have entered this hook as detailed here:
http://mercurial.selenic.com/wiki/FAQ#FAQ.2BAC8-CommonProblems.Any_way_to_.27hg_push.27_and_have_an_automatic_.27hg_update.27_on_the_remote_server.3F

This installs the hook, but when i push something to the remote repo i get an error:

added 1 changesets with 1 changes to 1 files
running hook changegroup: hg update >&2
warning: changegroup hook exited with status -1

There is a stackoverflow question similar to this here:
http://stackoverflow.com/questions/2885246/mercurial-auto-update-problem

but it offers no solutions other than it may be a permissions error somewhere.

Has anyone else had this problem and can anyone else shed any more light on this or give me a heads up on where to start fixing this? Thanks.