Here are some places that provide free Mercurial hosting:
[http://alioth.debian.org Alioth] (primarily for debian developers)
MercurialOnSourceforge explains how to host your repositories on sourceforge.
[http://shortcircuit.net.au ShortCircuit Hosting] - please contact prologic at shortcircuit dot net dot au via Email/IRC/MSN.
hgserve.org is currently in development.
Also see ServerInstall and PublishingRepositories if you want to host your own repositories.