I tried to a line .hgignore inside .hgignore file, so that it can ignore itself (weird concept, but wanted to try if it works) and users can make local customization of it without any problem. This has been suggest at many places in the Internet.  I tried by completing removing the file and adding a new one with .hgignore ignoring itself. But it does'nt seem to work. 

So a possible solution seems like this: If .rej and .orig needs to be removed from .hgignore, one should just remove it from the .hgignore file and for people who do not want to be bothered by .rej/.orig files in hg st, they can create an addition ignore directive in their .hgrc
http://mercurial.selenic.com/wiki/TipsAndTricks#Ignore_files_in_local_working_copy_only