Currently, Bazaar stores its configuration files and plugins under the directory ~/.bazaar on unix installs. On Windows, this is %APPDATA%/Bazaar/2.0 and on Mac OS X, the directory is ~/.bazaar. With the XDG Base Directory specification (http://standards.freedesktop.org/basedir-spec/basedir-spec-latest.html), many Linux and Unix platforms have tried to centralize configuration files under a specific directory referred to as $XDG_CONFIG_HOME. This has a default value of ~/.config.
Bazaar would like to be a good Unix citizen by using these standard locations for configuration files. As such, we should support that location, but not require it. Note that the following descriptions do not apply to Windows or Mac OS X which should use their own native configuration locations. (On Windows, we currently do this by working under %APPDATA%. The Mac OS X equivalent would be ~/Library/Application Support/Bazaar but there is also cultural support for ~/.bazaar on that platform.)