I am trying to set up WinMerge as the Merge tool into TortoiseHG; Here is my Mercurial.ini:
; User specific Mercurial config file.
; See the hgrc man page for de
You can add
winmergeu.binary=True
as found here if winmerge can merge binary files. If it can't you'll want to configure another merge tool that can and use matters to send the binary files to that tool.
You no longer have to mess with the .ini file. As long as you have both TortoiseHG and WinMerge installed you will see it as an option in TortoiseHG Global Settings - TortoiseHG section - Three-way Merge Tool and Visual Diff Tool. It shows up as "winmergeu". Banged my head against the wall for a couple hours before I found this; I must be blind.
WinMerge 2.12.4.0 Unicode
TortoiseHg 2.5.1
Mercurial 2.3.2