SVN not updating recursively

Following should work (with svn 1.7.x or later versions):

svn up --set-depth infinity

on next svn update command provide the parameter --depth:

svn up --depth infinity

on checking out a non-recursive checkout, subversion remembers this setting until you tell it otherwise.

Note: you should not use the parameter -N anymore as it is deprecated. Try to use --depth files or --depth immediates