This is a UI gotcha that we really ought to fix.  It should either accept
abbreviations or tell the user it doesn't like them (maybe as a warning). 
Adding Dmitry because I think he might know how to fix it :-)

Resolved by:

Mon Sep 29 18:19:48 MSD 2008  Dmitry Kurochkin <dmitry.kurochkin@gmail.com>
  * Resolve issue1105: check if default options are valid.

Wed Oct  1 21:59:07 MSD 2008  David Roundy <droundy@darcs.net>
  * fix bug in 1105 fix that led to improper overrides of defaults
  The problem is illustrated in the tests/override-defaults.sh that I've
  recorded separately.  We want conflicting defaults in
  ~/.darcs/defaults and _darcs/prefs/defaults to be resolved in favor of
  the default residing in _darcs/prefs/defaults.