hg update does nothing

[Stephen Rasku]

I have been using Mercurial to track changes to various files in my
home directory in Ubuntu.  I just installed Koala and I copied the .hg
directory from my backup to my home directory.  I want to restore the
latest version of the files but "hg update" doesn't seem to do
anything:

$ hg status | grep -v ^?
M .bashrc
! .hgignore
! .hgrc
! .ssh/authorized_keys
! .ssh/config
! .vimrc
! Music/Playlists/Grassy Hill Radio.pls

$ hg up -r tip
0 files updated, 0 files merged, 0 files removed, 0 files unresolved

I haven't tried cloning, yet.  Is there any reason what I'm doing won't work?

I am running Mercurial 1.3.1.