Let's create a git repository with a folder that has a single file in it:
$ cd /tmp
$ mkdir foo
$ cd foo/
$ git init
Initialized empty Git repository in /private/tmp/foo/.git/
$ mkdir bar
$ cd bar/
$ echo 'hello' > splat.txt
$ git add splat.txt
$ git ci -m 'adding a text file'
[master (root-commit) 069f11b] adding a text file
1 files changed, 1 insertions(+), 0 deletions(-)
create mode 100644 bar/splat.txt
So I now have a git repository and placed the file bar/splat.txt under revision control. Now if I do:
$ git rm splat.txt
This will not only remove splat.txt, but it will remove the whole bar directory. I say this will drive you insane, because if you try to move or copy a file into your current directory, you'll get an error that will probably catch you off guard. Like:
$ cp ~/.gitignore .
cp: ./.gitignore: No such file or directory
There is a file called .gitignore in my home directory, it's just that my current directory no longer exists. It took me about five minutes to realize what was going on... and I was starting to wonder if I knew how to use the cp command.
The reason I ran into this is that I was rearranging my .vim folder to use pathogen. I keep all of my dot files under source control and stumbled upon this while clearing out my vim autoload folder.