diff --git a/babel.nim b/babel.nim
index 0b8fda3..213c717 100644
--- a/babel.nim
+++ b/babel.nim
@@ -3,7 +3,7 @@
 
 import httpclient, parseopt, os, strutils, osproc, pegs, tables, parseutils
 
-import packageinfo, version, common, tools
+import packageinfo, version, common, tools, download
 
 type
   TActionType = enum
@@ -103,29 +103,6 @@ proc update(url: string = defaultPackageURL) =
   downloadFile(url, babelDir / "packages.json")
   echo("Done.")
 
-proc copyFileD(fro, to: string) =
-  echo(fro, " -> ", to)
-  copyFile(fro, to)
-
-proc copyDirD(fro, to: string) =
-  echo(fro, " -> ", to)
-  copyDir(fro, to)
-
-proc doCmd(cmd: string) =
-  let exitCode = execCmd(cmd)
-  if exitCode != QuitSuccess:
-    quit("Execution failed with exit code " & $exitCode, QuitFailure)
-
-template cd(dir: string, body: stmt) =
-  ## Sets the current dir to ``dir``, executes ``body`` and restores the
-  ## previous working dir.
-  let lastDir = getCurrentDir()
-  echo("cd ", dir)
-  setCurrentDir(dir)
-  echo(getCurrentDir())
-  body
-  setCurrentDir(lastDir)
-
 proc checkInstallFile(pkgInfo: TPackageInfo,
                       origDir, file: string): bool =
   ## Checks whether ``file`` should be installed.
@@ -292,61 +269,12 @@ proc installFromDir(dir: string, latest: bool): string =
 
   echo(pkgInfo.name & " installed successfully.")
 
-proc getTagsList(dir: string): seq[string] =
-  cd dir:
-    let output = execProcess("git tag")
-  if output.len > 0:
-    result = output.splitLines()
-  else:
-    result = @[]
-
-proc getVersionList(dir: string): TTable[TVersion, string] =
-  # Returns: TTable of version -> git tag name
-  result = initTable[TVersion, string]()
-  let tags = getTagsList(dir)
-  for tag in tags:
-    let i = skipUntil(tag, digits) # skip any chars before the version
-    # TODO: Better checking, tags can have any names. Add warnings and such.
-    result[newVersion(tag[i .. -1])] = tag
-
 proc downloadPkg(pkg: TPackage, verRange: PVersionRange): string =
   let downloadDir = (getTempDir() / "babel" / pkg.name)
   if not existsDir(getTempDir() / "babel"): createDir(getTempDir() / "babel")
   echo("Downloading ", pkg.name, " into ", downloadDir, "...")
-  case pkg.downloadMethod
-  of "git":
-    echo("Executing git...")
-    if existsDir(downloadDir / ".git"):
-      cd downloadDir:
-        doCmd("git checkout master")
-        doCmd("git pull")
-    else:
-      removeDir(downloadDir)
-      doCmd("git clone --depth 1 " & pkg.url & " " & downloadDir)
+  doDownload(pkg, downloadDir, verRange)
     
-    # TODO: Determine if version is a commit hash, if it is. Move the
-    # git repo to ``babelDir/pkgs``, then babel can simply checkout
-    # the correct hash instead of constantly cloning and copying.
-    # N.B. This may still partly be requires, as one lib may require hash A
-    # whereas another lib requires hash B and they are both required by the
-    # project you want to build.
-    let versions = getVersionList(downloadDir)
-    if versions.len > 0:
-      let latest = findLatest(verRange, versions)
-      
-      if latest.tag != "":
-        cd downloadDir:
-          doCmd("git checkout " & latest.tag)
-    elif verRange.kind != verAny:
-      let pkginfo = getPkgInfo(downloadDir)
-      if pkginfo.version.newVersion notin verRange:
-        raise newException(EBabel,
-              "No versions of " & pkg.name &
-              " exist (this usually means that `git tag` returned nothing)." &
-              "Git HEAD also does not satisfy version range: " & $verRange)
-      # We use GIT HEAD if it satisfies our ver range
-      
-  else: raise newException(EBabel, "Unknown download method: " & pkg.downloadMethod)
   result = downloadDir
 
 proc install(packages: seq[String], verRange: PVersionRange): string =
diff --git a/common.nim b/common.nim
index 15e2a02..e7d8d9a 100644
--- a/common.nim
+++ b/common.nim
@@ -1,4 +1,15 @@
 # Copyright (C) Dominik Picheta. All rights reserved.
 # BSD License. Look at license.txt for more info.
+
+import os, osproc
+
 type
-  EBabel* = object of EBase
\ No newline at end of file
+  EBabel* = object of EBase
+
+proc copyFileD*(fro, to: string) =
+  echo(fro, " -> ", to)
+  copyFile(fro, to)
+
+proc copyDirD*(fro, to: string) =
+  echo(fro, " -> ", to)
+  copyDir(fro, to)
\ No newline at end of file
diff --git a/download.nim b/download.nim
new file mode 100644
index 0000000..18ed3ba
--- /dev/null
+++ b/download.nim
@@ -0,0 +1,117 @@
+# Copyright (C) Dominik Picheta. All rights reserved.
+# BSD License. Look at license.txt for more info.
+
+import parseutils, os, osproc, strutils, tables
+
+import packageinfo, common, version, tools
+
+type  
+  TDownloadMethod {.pure.} = enum
+    Git = "git", Hg = "hg"
+
+proc getSpecificDir(meth: TDownloadMethod): string =
+  case meth
+  of TDownloadMethod.Git:
+    ".git"
+  of TDownloadMethod.Hg:
+    ".hg"
+
+proc doCheckout(meth: TDownloadMethod, downloadDir, branch: string) =
+  case meth
+  of TDownloadMethod.Git:
+    cd downloadDir:
+      doCmd("git checkout " & branch)
+  of TDownloadMethod.Hg:
+    cd downloadDir:
+      doCmd("hg checkout " & branch)
+
+proc doPull(meth: TDownloadMethod, downloadDir: string) =
+  case meth
+  of TDownloadMethod.Git:
+    doCheckout(meth, downloadDir, "master")
+    cd downloadDir:
+      doCmd("git pull")
+  of TDownloadMethod.Hg:
+    doCheckout(meth, downloadDir, "default")
+    cd downloadDir:
+      doCmd("hg pull")
+
+proc doClone(meth: TDownloadMethod, url, downloadDir: string) =
+  case meth
+  of TDownloadMethod.Git:
+    doCmd("git clone --depth 1 " & url & " " & downloadDir)
+  of TDownloadMethod.Hg:
+    doCmd("hg clone " & url & " " & downloadDir)
+
+proc getTagsList(dir: string, meth: TDownloadMethod): seq[string] =
+  cd dir:
+    var output = execProcess("git tag")
+    case meth
+    of TDownloadMethod.Git:
+      output = execProcess("git tag")
+    of TDownloadMethod.Hg:
+      output = execProcess("hg tags")
+  if output.len > 0:
+    case meth
+    of TDownloadMethod.Git:
+      result = output.splitLines()
+    of TDownloadMethod.Hg:
+      result = @[]
+      for i in output.splitLines():
+        var tag = ""
+        discard parseUntil(i, tag, ' ')
+        if tag != "tip":
+          result.add(tag)
+  else:
+    result = @[]
+
+proc getVersionList(dir: string,
+                    meth: TDownloadMethod): TTable[TVersion, string] =
+  # Returns: TTable of version -> git tag name
+  result = initTable[TVersion, string]()
+  let tags = getTagsList(dir, meth)
+  for tag in tags:
+    let i = skipUntil(tag, digits) # skip any chars before the version
+    # TODO: Better checking, tags can have any names. Add warnings and such.
+    result[newVersion(tag[i .. -1])] = tag
+
+proc getDownloadMethod(meth: string): TDownloadMethod =
+  case meth
+  of "git": return TDownloadMethod.Git
+  of "hg", "mercurial": return TDownloadMethod.Hg
+  else:
+    raise newException(EBabel, "Invalid download method: " & meth)
+
+proc doDownload*(pkg: TPackage, downloadDir: string, verRange: PVersionRange) =
+  let downMethod = pkg.downloadMethod.getDownloadMethod()
+  echo "Executing ", downMethod, "..."
+  
+  if existsDir(downloadDir / getSpecificDir(downMethod)):
+    doPull(downMethod, downloadDir)
+  else:
+    removeDir(downloadDir)
+    doClone(downMethod, pkg.url, downloadDir)
+  
+  # TODO: Determine if version is a commit hash, if it is. Move the
+  # git repo to ``babelDir/pkgs``, then babel can simply checkout
+  # the correct hash instead of constantly cloning and copying.
+  # N.B. This may still partly be required, as one lib may require hash A
+  # whereas another lib requires hash B and they are both required by the
+  # project you want to build.
+  let versions = getVersionList(downloadDir, downMethod)
+  if versions.len > 0:
+    echo("Found tags...")
+    var latest = findLatest(verRange, versions)
+    ## Note: HEAD is not used when verRange.kind is verAny. This is
+    ## intended behaviour, the latest tagged version will be used in this case.
+    if latest.tag != "":
+      echo("Switching to latest tagged version: ", latest.tag)
+      doCheckout(downMethod, downloadDir, latest.tag)
+  elif verRange.kind != verAny:
+    let pkginfo = getPkgInfo(downloadDir)
+    if pkginfo.version.newVersion notin verRange:
+      raise newException(EBabel,
+            "No versions of " & pkg.name &
+            " exist (this usually means that `git tag` returned nothing)." &
+            "Git HEAD also does not satisfy version range: " & $verRange)
+    # We use GIT HEAD if it satisfies our ver range
diff --git a/readme.markdown b/readme.markdown
index 0cd604d..da3dc62 100644
--- a/readme.markdown
+++ b/readme.markdown
@@ -118,6 +118,19 @@ greater-than (``>``), less-than-or-equal-to (``<=``) and greater-than-or-equal-t
 ``> 0.2 & < 1.0`` which will install a package with the version greater than 0.2
 and less than 1.0.
 
+## Versions
+
+Versions of cloned packages via git or mercurial are determined through
+the repo's *tags*.
+
+When installing a package which needs to be downloaded, after the
+download is complete and if the package is distributed through a VCS, babel
+will check the cloned repo's tags list. If no tags exist, babel will simply
+install the HEAD (or tip in mercurial) of the repo. If tags exist, babel will
+attempt to look for tags which resemble versions (e.g. v0.1) and will then
+find the latest version out of the available tags, once it does so it will install
+the package after checking out the latest version.
+
 ## .babel reference
 
 ### [Package]
@@ -126,7 +139,7 @@ and less than 1.0.
 
 * ``name`` - The name of the package.
 * ``version`` - The *current* version of this package. This should be incremented
-  after tagging the current version using ``git tag``.
+  **after** tagging the current version using ``git tag`` or ``hg tag``.
 * ``author`` - The name of the author of this package.
 * ``description`` - A string describing the package.
 * ``license`` - The name of the license in which this package is licensed under.
diff --git a/todo.markdown b/todo.markdown
index 98c97ae..e3a850f 100644
--- a/todo.markdown
+++ b/todo.markdown
@@ -9,4 +9,5 @@
 * more package download methods
   * Allow for proper versions of packages to download. Reuse 'version' field
     in packages.json.
-* Install only .nim files when installing library packages?
\ No newline at end of file
+* Install only .nim files when installing library packages?
+* Force disable --babelPath when building binary packages?
\ No newline at end of file
diff --git a/tools.nim b/tools.nim
index 13eb1e3..e82d98c 100644
--- a/tools.nim
+++ b/tools.nim
@@ -5,6 +5,21 @@
 import osproc, pegs, strutils, os
 import version
 
+# TODO: Merge with common.nim?
+
+proc doCmd*(cmd: string) =
+  let exitCode = execCmd(cmd)
+  if exitCode != QuitSuccess:
+    quit("Execution failed with exit code " & $exitCode, QuitFailure)
+
+template cd*(dir: string, body: stmt) =
+  ## Sets the current dir to ``dir``, executes ``body`` and restores the
+  ## previous working dir.
+  let lastDir = getCurrentDir()
+  setCurrentDir(dir)
+  body
+  setCurrentDir(lastDir)
+
 proc getNimrodVersion*: TVersion =
   let vOutput = execProcess("nimrod -v")
   var matches: array[0..MaxSubpatterns, string]