After researching mercurial and reading http://thread.gmane.org/gmane.comp.version-control.mercurial.devel/40107 I have been sufficiently warned about the dangers of nested subrepos. However, I have to use mercurial and subrepos seem like a useful tool. My issue is similar to Hg sub-repository dependencies. My basic issue is this: I have a utilities repository that is used by many projects. Some of those projects are dependent on the utilities. It seems natural to have a project repository with a utilities subrepo nested under the main repository instead of 2 subrepos under a larger repository. This would make it easy to pull the correct version of the utilities subrepo if the projects need different versions.
I'm not sure I fully understand the problems from nesting subrepos as it seems like the best solution despite all the warnings.