IMHO, 'darcs init' should warn when it is run in a subfolder of an existing
repository. It currently warns when you are in the folder containing '_darcs',
so it *should* warn if you are in any subfolder of the repository. Either use
the same warning, or something like "Darcs does not support nested repositories.
This is probably not what you want to do.".
For example:
mkdir foo;
cd foo;
darcs init;
mkdir bar;
cd bar;
darcs init;
To fix this, darcs needs to walk up the folder hierarchy checking each parent
folder for an '_darcs' folder.
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