I'm trying to configure Hudson to checkout my site's sources from Mercurial but it throws an exception. The /var/lib/hudson/jobs/jobname directory does exist, and I can create a workspace directory in there (even after su hudson), but as soon as I run the Hudson job again this directory disappears and the job ends with the same error:

java.io.IOException: Cannot run program "hg" (in directory "/var/lib/hudson/jobs/jobname/workspace"): java.io.IOException: error=2, No such file or directory
    at java.lang.ProcessBuilder.start(ProcessBuilder.java:460)
    at hudson.Proc$LocalProc.<init>(Proc.java:192)
    at hudson.Proc$LocalProc.<init>(Proc.java:164)
    at hudson.Launcher$LocalLauncher.launch(Launcher.java:639)
    at hudson.Launcher$ProcStarter.start(Launcher.java:274)
    at hudson.Launcher$ProcStarter.join(Launcher.java:281)
    at hudson.plugins.mercurial.MercurialSCM.joinWithPossibleTimeout(MercurialSCM.java:298)
    at hudson.plugins.mercurial.HgExe.popen(HgExe.java:191)
    at hudson.plugins.mercurial.HgExe.tip(HgExe.java:171)
    at hudson.plugins.mercurial.MercurialSCM.calcRevisionsFromBuild(MercurialSCM.java:254)
    at hudson.scm.SCM._calcRevisionsFromBuild(SCM.java:304)
    at hudson.model.AbstractProject.calcPollingBaseline(AbstractProject.java:1183)
    at hudson.model.AbstractProject.checkout(AbstractProject.java:1172)
    at hudson.model.AbstractBuild$AbstractRunner.checkout(AbstractBuild.java:499)
    at hudson.model.AbstractBuild$AbstractRunner.run(AbstractBuild.java:415)
    at hudson.model.Run.run(Run.java:1362)
    at hudson.model.FreeStyleBuild.run(FreeStyleBuild.java:46)
    at hudson.model.ResourceController.execute(ResourceController.java:88)
    at hudson.model.Executor.run(Executor.java:145)
Caused by: java.io.IOException: java.io.IOException: error=2, No such file or directory
    at java.lang.UNIXProcess.<init>(UNIXProcess.java:148)
    at java.lang.ProcessImpl.start(ProcessImpl.java:65)
    at java.lang.ProcessBuilder.start(ProcessBuilder.java:453)

Running on Debian 6.0.1

I wonder if anyone has ran into this before, and hopefully solved it?