[edited to correct confusion over paths]
My Mac version of latex includes two versions of url.sty --- one is from 2006 and supports [lowtilde] while the other is from 1999 and does not:
$ grep 'ver ' /usr/local/texlive/2011/texmf/tex/latex/html/url.sty
% url.sty ver 1.4 02-Mar-1999 Donald Arseneau asnd@triumf.ca
\ProvidesPackage{url}[1999/03/02 \space ver 1.4 \space
% url.sty ver 1.4 02-Mar-1999 Donald Arseneau asnd@reg.triumf.ca
% characters. The "\url" command will *never ever* hyphenate words.
% command follows whatever the currently-set style dictates.
% I.e., using whatever url-style has been selected.
% ver 1.1 6-Feb-1996:
% ver 1.2 19-Oct-1996:
% ver 1.3 21-Jul-1997:
% ver 1.4 02-Mar-1999
$ grep 'ver ' /usr/local/texlive/2011/texmf-dist/tex/latex/url/url.sty
% url.sty ver 3.3 12-Apr-2006 Donald Arseneau asnd@triumf.ca
{url}[2006/04/12 \space ver 3.3 \space Verb mode for urls, etc.]
% url.sty ver 3.3 12-Apr-2006 Donald Arseneau asnd@triumf.ca
% characters. The "\url" command will *never ever* hyphenate words.
% command follows whatever the currently-set style dictates.
% I.e., using whatever "\urlstyle" and other settings are already in effect.
% ver 1.1 6-Feb-1996:
% ver 1.2 19-Oct-1996:
% ver 1.3 21-Jul-1997:
% ver 1.4 02-Mar-1999:
% ver 1.5 28-Mar-1999:
% ver 1.6 20-Jun-2002:
% ver 3.0 June 2003/Nov 2003:
% ver 3.1 Mar 2004:
% ver 3.2 June 2005:
% ver 3.3 April 2006:
$
Why are two versions installed and how to I specify the correct version?

url.sty, and thelowtildeoption can be used with this version. What exactly do you mean with "does not support"? – Gonzalo Medina Oct 7 '11 at 1:51url.styfiles, one intexmf/tex/laytex/html/url.styand one intexmf-dist/tex/latex/url/url.sty. The first is from 1999 and does not have the option. Why are there two and how do I get the proper one? – vy32 Oct 7 '11 at 2:24/texmf/tex/latex. I would suggest deleting it, and then rerunningtexhash(or refreshing your filename database viatlmgr). – Werner Oct 7 '11 at 2:48tex/latex/htmlsubdirectory under/usr/local/texlive/2011/texmf. So it must have been installed by some other program. – egreg Oct 9 '11 at 9:57