Checking in folders is somewhat impractical.

[enlight]

If you attempt to check-in a folder in UnrealEd a dialog will popup to allow you to enter your commit message and select which modified files should be committed. The problem is that UnrealEd will display every checked-out file in that particular folder (as opposed to just modified/added/removed files) because the Mercurial plugin always has everything checked out. This is clearly far from ideal, unfortunately fixing this will require some changes to UnrealEd itself.