Mercurial is still actively developed, and isn't really "dead", although it did lose a lot of popularity and "mindshare".

Projects like Firefox and nginx use it, although others like Vim and Python switched to GitHub. I don't know if Facebook is still using Mercurial internally, but for their public stuff they use GitHub.

I think that if GitHub had supported Mercurial like BitBucket or Google Code it would still be a lot more popular, but ah well...