How to mark file as resolved using local/remote version

With newer versions of Mercurial (1.7.0 and later), you can use hg merge --tool internal:local to keep the local version (i.e. the one that's in your working directory), or hg merge --tool internal:other to keep the other version. The --tool option was introduced as a shorthand for --config ui.merge=internal:local, which was how you did it in older versions of Mercurial.

See the merge-tools online help or use hg help merge-tools at the command-line for more information.