If you install the awesome HgEclipse and point it at the even awesomer BitBucket you may run into the nasty error in the title. This is because the version of Mercurial packaged in HgEclipse is out-of-date and is now no longer compatible with BitBucket.
Don't panic. The fix is easy: go to Team -> Mercurial in your preferences and change your Mercurial Executable to use the awesome TortoiseHg eg set it to C:\Program Files\TortoiseHg\hg.exe. Now you're good to go, just right click on the projects and refresh their status.
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