We have a CVS repository with years of development history and 3 projects under one project (CVS folder). Those should be different repositories in a Mercurial repo. They are in the following scheme:
Project
---Sub Project 1
---Sub Project 2
---Sub Project 3
Simply run cvs2hg three times, each time pointing it at a project subdirectory within your CVS repository; e.g.,
cvs2hg [OTHER-OPTIONS...] $CVSROOT/Project/SubProject1
Write the results into three separate Mercurial repositories.