On Windows (XP SP3) it is possible to clone a repository using a file: URL, but attempting a pull, push or sync fails (and occasionally crashes).  

This occurs whether you are in an open repository or specifying the repository via -R.  Also no difference between absolute and relative file: URLs.

To reproduce:

<pre>
C:> mkdir repo1 && cd repo1
C:> fossil new repo1.fossil
C:> cd ..
C:> mkdir repo2 && cd repo2
C:> fossil clone file://../repo1/repo1.fossil repo2.fossil
C:> fossil sync file://../repo1/repo1.fossil -R repo2.fossil
                Bytes      Cards  Artifacts     Deltas
Send:             263          3          0          0
'fossil" http "C:' is not recognized as an internal or external command,
operable program or batch file.
C:> fossil open repo2.fossil
C:> fossil sync file://../repo1/repo1.fossil
                Bytes      Cards  Artifacts     Deltas
Send:             263          3          0          0
'fossil" http "C:' is not recognized as an internal or external command,
operable program or batch file.
</pre>