How would you use a Distributed Version Control System like Mercurial or Bazaar to manage large binary files?

For Mercurial, you can use bfiles extension (or one of the others that are listed on that page). Then only file metadata is stored inside the repo, and the content of big files is kept on a central server. I haven't used any of those extensions, though, so I can't tell which one would be the best choice.

Even though this is not a DVCS, you may want to look at Dropbox. You mostly work with the recent version of each tile but it keeps versioning information for each file so you can get back to the previos version if necessary. They also use binary deltas which may reduce upload/download times.

One big advantage of Dropbox is a very natural user interface which virtually every computer user is comfortable with. I have tried in the past to get designers and other non-technical people to use engineering version control systems and it wasn't always easy for them.

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