There are a lot of Version Control systems available, including open-source ones such as Subversion, Git, and Mercurial, plus commercial ones such as Perforce. How well do they support the process of game-development? What are the issues using VCS, with regard to non-text files (binary files), large projects, etc? What are solutions to these problems, if any?

For organization of Answers, let's try on a per-package basis. Update each package/Answer with your results.

Also, please list some brief details in your answer, about whether your VCS is free or commercial, distributed versus centralized, etc.

Update: Found a nice article comparing two of the VCS below - apparently, Git is MacGyver and Mercurial is Bond. Well, I'm glad that's settled... And the author has a nice quote at the end:

It’s OK to proselytize to those who have not switched to a distributed VCS yet, but trying to convert a Git user to Mercurial (or vice-versa) is a waste of everyone’s time and energy.

Especially since Git and Mercurial's real enemy is Subversion. Dang, it's a code-eat-code world out there in FOSS-land...