but many/most dotfiles reside at the top-level of your home directory, where it wouldn't be a good idea to initialize a VCS repository I totally disagree. I love having much of my home directory in git. I have a .gitiignore for the stuff I don't want in there, but the rest. Ahhhhh, so nice to be able to clone somewhere else and use.
Like, say you thought ~/src/xulrunner was a git repo, but it was actually managed with hg or maybe was extracted from a tarball. Whereas normally executing some git command would complain that this is not a repo, if your ~ is a git repo then git will happily execute whatever you told it to on your dotfiles repo.