Just like aliases in bash, you can create aliases for Mercurial commands. This functionality is available through the alias extension. Just create a new section in your Mercurial configuration file and add aliases.
For example, to create an alias to show log in graph format and another to show compact log:
[alias] lg = log --graph lc = log --style=compact
Even Mercurial commands can be replaced with an alias.
Tried with: Mercurial 2.0.2 and Ubuntu 12.04.1 LTS