This also happens when using "sudo" to impersonate another user, because "sudo" doesn't change the HOME variable like "su" does. I have just encountered this on Ubuntu Lucid 32-bit. I am using fossil version [528c581154] 2010-09-28 18:40:01 UTC.

fossil clone ./reu2.fossil
<br>fossil: home directory must be writeable

Regards,
Adam J Richardson