Index: src/checkout.c
==================================================================
--- src/checkout.c
+++ src/checkout.c
@@ -39,15 +39,53 @@
 }
 
 /*
 ** Undo the current check-out.  Unlink all files from the disk.
 ** Clear the VFILE table.
+**
+** Also delete any directory that becomes empty as a result of deleting
+** files due to this operation, as long as that directory is not the
+** current working directory and is not on the empty-dirs list.
 */
 void uncheckout(int vid){
-  if( vid>0 ){
-    vfile_unlink(vid);
-  }
+  char *zPwd;
+  if( vid<=0 ) return;
+  sqlite3_create_function(g.db, "dirname",1,SQLITE_UTF8,0,
+                          file_dirname_sql_function, 0, 0);
+  sqlite3_create_function(g.db, "unlink",1,SQLITE_UTF8,0,
+                          file_delete_sql_function, 0, 0);
+  sqlite3_create_function(g.db, "rmdir", 1, SQLITE_UTF8, 0,
+                          file_rmdir_sql_function, 0, 0);
+  db_multi_exec(
+    "CREATE TEMP TABLE dir_to_delete(name TEXT %s PRIMARY KEY)WITHOUT ROWID",
+    filename_collation()
+  );
+  db_multi_exec(
+    "INSERT OR IGNORE INTO dir_to_delete(name)"
+    "  SELECT dirname(pathname) FROM vfile"
+    "   WHERE vid=%d AND mrid>0",
+    vid
+  );
+  do{
+    db_multi_exec(
+      "INSERT OR IGNORE INTO dir_to_delete(name)"
+      " SELECT dirname(name) FROM dir_to_delete;"
+    );
+  }while( db_changes() );
+  db_multi_exec(
+    "SELECT unlink(%Q||pathname) FROM vfile"
+    " WHERE vid=%d AND mrid>0;",
+    g.zLocalRoot, vid
+  );
+  ensure_empty_dirs_created(1);
+  zPwd = file_getcwd(0,0);
+  db_multi_exec(
+    "SELECT rmdir(%Q||name) FROM dir_to_delete"
+    " WHERE (%Q||name)<>%Q ORDER BY name DESC",
+    g.zLocalRoot, g.zLocalRoot, zPwd
+  );
+  fossil_free(zPwd);
   db_multi_exec("DELETE FROM vfile WHERE vid=%d", vid);
 }
 
 
 /*
@@ -303,11 +341,11 @@
   if( !keepFlag ){
     vfile_to_disk(vid, 0, !g.fQuiet, promptFlag);
   }
   checkout_set_all_exe(vid);
   manifest_to_disk(vid);
-  ensure_empty_dirs_created();
+  ensure_empty_dirs_created(0);
   db_set_checkout(vid);
   undo_reset();
   db_multi_exec("DELETE FROM vmerge");
   if( !keepFlag && db_get_boolean("repo-cksum",1) ){
     vfile_aggregate_checksum_manifest(vid, &cksum1, &cksum1b);

Index: src/file.c
==================================================================
--- src/file.c
+++ src/file.c
@@ -437,10 +437,29 @@
     return mprintf("%.*s", (int)(zTail-z-1), z);
   }else{
     return 0;
   }
 }
+
+/* SQL Function:  file_dirname(NAME)
+**
+** Return the directory for NAME
+*/
+void file_dirname_sql_function(
+  sqlite3_context *context,
+  int argc,
+  sqlite3_value **argv
+){
+  const char *zName = (const char*)sqlite3_value_text(argv[0]);
+  char *zDir;
+  if( zName==0 ) return;
+  zDir = file_dirname(zName);
+  if( zDir ){
+    sqlite3_result_text(context,zDir,-1,fossil_free);
+  }
+}
+
 
 /*
 ** Rename a file or directory.
 ** Returns zero upon success.
 */
@@ -594,10 +613,30 @@
   rc = unlink(zFilename);
 #endif
   fossil_path_free(z);
   return rc;
 }
+
+/* SQL Function:  file_delete(NAME)
+**
+** Remove file NAME.  Return zero on success and non-zero if anything goes
+** wrong.
+*/
+void file_delete_sql_function(
+  sqlite3_context *context,
+  int argc,
+  sqlite3_value **argv
+){
+  const char *zName = (const char*)sqlite3_value_text(argv[0]);
+  int rc;
+  if( zName==0 ){
+    rc = 1;
+  }else{
+    rc = file_delete(zName);
+  }
+  sqlite3_result_int(context, rc);
+}
 
 /*
 ** Create a directory called zName, if it does not already exist.
 ** If forceFlag is 1, delete any prior non-directory object
 ** with the same name.
@@ -684,10 +723,30 @@
     fossil_path_free(zMbcs);
     return rc;
   }
   return 0;
 }
+
+/* SQL Function: rmdir(NAME)
+**
+** Try to remove the directory NAME.  Return zero on success and non-zero
+** for failure.
+*/
+void file_rmdir_sql_function(
+  sqlite3_context *context,
+  int argc,
+  sqlite3_value **argv
+){
+  const char *zName = (const char*)sqlite3_value_text(argv[0]);
+  int rc;
+  if( zName==0 ){
+    rc = 1;
+  }else{
+    rc = file_rmdir(zName);
+  }
+  sqlite3_result_int(context, rc);
+}
 
 /*
 ** Return true if the filename given is a valid filename for
 ** a file in a repository.  Valid filenames follow all of the
 ** following rules:
@@ -890,12 +949,20 @@
 ** Get the current working directory.
 **
 ** On windows, the name is converted from unicode to UTF8 and all '\\'
 ** characters are converted to '/'.  No conversions are needed on
 ** unix.
+**
+** Store the value of the CWD in zBuf which is nBuf bytes in size.
+** or if zBuf==0, allocate space to hold the result using fossil_malloc().
 */
-void file_getcwd(char *zBuf, int nBuf){
+char *file_getcwd(char *zBuf, int nBuf){
+  char zTemp[2000];
+  if( zBuf==0 ){
+    zBuf = zTemp;
+    nBuf = sizeof(zTemp);
+  }
 #ifdef _WIN32
   win32_getcwd(zBuf, nBuf);
 #else
   if( getcwd(zBuf, nBuf-1)==0 ){
     if( errno==ERANGE ){
@@ -904,10 +971,11 @@
       fossil_panic("cannot find current working directory; %s",
                    strerror(errno));
     }
   }
 #endif
+  return zBuf==zTemp ? fossil_strdup(zBuf) : zBuf;
 }
 
 /*
 ** Return true if zPath is an absolute pathname.  Return false
 ** if it is relative.

Index: src/update.c
==================================================================
--- src/update.c
+++ src/update.c
@@ -160,11 +160,11 @@
     }
   }
 
   /* Create any empty directories now, as well as after the update,
   ** so changes in settings are reflected now */
-  if( !dryRunFlag ) ensure_empty_dirs_created();
+  if( !dryRunFlag ) ensure_empty_dirs_created(0);
 
   if( internalUpdate ){
     tid = internalUpdate;
   }else if( g.argc>=3 ){
     if( fossil_strcmp(g.argv[2], "current")==0 ){
@@ -227,10 +227,14 @@
   if( tid==0 ){
     return;
   }
 
   db_begin_transaction();
+  db_multi_exec(
+     "CREATE TEMP TABLE dir_to_delete(name TEXT %s PRIMARY KEY)WITHOUT ROWID",
+     filename_collation()
+  );
   vfile_check_signature(vid, CKSIG_ENOTFILE);
   if( !dryRunFlag && !internalUpdate ) undo_begin();
   if( load_vfile_from_rid(tid) && !forceMissingFlag ){
     fossil_fatal("missing content, unable to update");
   };
@@ -455,11 +459,23 @@
                      zName);
         nConflict++;
       }else{
         fossil_print("REMOVE %s\n", zName);
         if( !dryRunFlag && !internalUpdate ) undo_save(zName);
-        if( !dryRunFlag ) file_delete(zFullPath);
+        if( !dryRunFlag ){
+          char *zDir;
+          file_delete(zFullPath);
+          zDir = file_dirname(zName);
+          while( zDir!=0 ){
+            char *zNext;
+            db_multi_exec("INSERT OR IGNORE INTO dir_to_delete(name)"
+                          "VALUES(%Q)", zDir);
+            zNext = db_changes() ? file_dirname(zDir) : 0;
+            fossil_free(zDir);
+            zDir = zNext;
+          }
+        }
       }
     }else if( idt>0 && idv>0 && ridt!=ridv && chnged ){
       /* Merge the changes in the current tree into the target version */
       Blob r, t, v;
       int rc;
@@ -566,11 +582,21 @@
   ** Clean up the mid and pid VFILE entries.  Then commit the changes.
   */
   if( dryRunFlag ){
     db_end_transaction(1);  /* With --dry-run, rollback changes */
   }else{
-    ensure_empty_dirs_created();
+    char *zPwd;
+    ensure_empty_dirs_created(1);
+    sqlite3_create_function(g.db, "rmdir", 1, SQLITE_UTF8, 0,
+                            file_rmdir_sql_function, 0, 0);
+    zPwd = file_getcwd(0,0);
+    db_multi_exec(
+      "SELECT rmdir(%Q||name) FROM dir_to_delete"
+      " WHERE (%Q||name)<>%Q ORDER BY name DESC",
+      g.zLocalRoot, g.zLocalRoot, zPwd
+    );
+    fossil_free(zPwd);
     if( g.argc<=3 ){
       /* All files updated.  Shift the current checkout to the target. */
       db_multi_exec("DELETE FROM vfile WHERE vid!=%d", tid);
       checkout_set_all_exe(tid);
       manifest_to_disk(tid);
@@ -587,11 +613,11 @@
 }
 
 /*
 ** Create empty directories specified by the empty-dirs setting.
 */
-void ensure_empty_dirs_created(void){
+void ensure_empty_dirs_created(int clearDirTable){
   char *zEmptyDirs = db_get("empty-dirs", 0);
   if( zEmptyDirs!=0 ){
     int i;
     Blob dirName;
     Blob dirsList;
@@ -613,11 +639,16 @@
                            "required by empty-dirs setting", zDir);
           }
           break;
         }
         case 1: { /* exists, and is a directory */
-          /* do nothing - required directory exists already */
+          /* make sure this directory is not on the delete list */
+          if( clearDirTable ){
+            db_multi_exec(
+              "DELETE FROM dir_to_delete WHERE name=%Q", zDir
+            );
+          }
           break;
         }
         case 2: { /* exists, but isn't a directory */
           fossil_warning("file %s found, but a directory is required "
                          "by empty-dirs setting", zDir);

Index: src/vfile.c
==================================================================
--- src/vfile.c
+++ src/vfile.c
@@ -359,28 +359,10 @@
                   file_mtime(zName, RepoFILE), id);
   }
   db_finalize(&q);
 }
 
-
-/*
-** Delete from the disk every file in VFILE vid.
-*/
-void vfile_unlink(int vid){
-  Stmt q;
-  db_prepare(&q, "SELECT %Q || pathname FROM vfile"
-                 " WHERE vid=%d AND mrid>0", g.zLocalRoot, vid);
-  while( db_step(&q)==SQLITE_ROW ){
-    const char *zName;
-
-    zName = db_column_text(&q, 0);
-    file_delete(zName);
-  }
-  db_finalize(&q);
-  db_multi_exec("UPDATE vfile SET mtime=NULL WHERE vid=%d AND mrid>0", vid);
-}
-
 /*
 ** Check to see if the directory named in zPath is the top of a checkout.
 ** In other words, check to see if directory pPath contains a file named
 ** "_FOSSIL_" or ".fslckout".  Return true or false.
 */