Difference between Revert and Update in Mercurial

The first difference is revert can work on a subset of the working copy while update works on the whole working copy. the other difference is in what happens when you want to go back to a version other than the last committed one.

if we have revisions (caps are committed, lower case are changes in the working copy, parent revision is C )

A-B-C-d

update -C -r B will give you

A-B-C

with your working copy set to B, any changes will result in branching from B (parent revision set to B)

A-B-C
  \e

revert -r B will give you

A-B-C-b'

where b' is a set of changes which undoes everything in the intermediate committed changes, in this case it undoes all of C. any changes now just join the b' set (parent revision left unchanged at C)