<hr /><i>anonymous claiming to be seanc added on 2011-03-12 17:18:14 UTC:</i><br />
Nope, most certainly broken. Here, try this:

<verbatim>9:14 sean@somehost-98 % fs info
project-name: <unnamed>
repository:   /Users/sean/src/.fossils/fossil-test-repository
local-root:   /private/tmp/fst/
project-code: 70164ac6b1269749f782f3dfce03f9cae7fc0c64
server-code:  4d7de95913a31ac17b29e29e96794b42d2575025
checkout:     b006a48a67d94f6acedde8fc26bc44d5ab793b79 2011-03-12 17:04:53 UTC
parent:       72ede87aa33fb39c8fac6c72adb1c5dc69260597 2011-03-12 17:03:15 UTC
tags:         trunk
comment:      files ended up in the wrong dir (user: sean)
9:14 sean@somehost-98 % fs ls
foo/bur/baz/file1.txt
foo/bur/baz/file2.txt
test.sh
9:14 sean@somehost-98 % pwd
/tmp/fst/foo/bur/baz
9:14 sean@somehost-98 % echo asdf >> file1.txt 
9:14 sean@somehost-98 % ll
total 16
-rw-r--r--  1 sean  wheel  11 Mar 12 09:14 file1.txt
-rw-r--r--  1 sean  wheel   6 Mar 12 09:03 file2.txt
9:14 sean@somehost-98 % fs di /tmp/fst/foo/bur/baz/file1.txt 
fossil: file outside of checkout tree: /tmp/fst/foo/bur/baz/file1.txt
Exit 1
9:15 sean@somehost-98 % fs di file1.txt 
--- file1.txt
+++ file1.txt
@@ -1,1 +1,2 @@
 test1
+asdf
</verbatim>