SVN upgrade working copy

from eclipse, you can select on the project, right click->team->upgrade

You have to upgrade your subversion client to at least 1.7.

With the command line client, you have to manually upgrade your working copy format by issuing the command svn upgrade:

Upgrading the Working Copy

Subversion 1.7 introduces substantial changes to the working copy format. In previous releases of Subversion, Subversion would automatically update the working copy to the new format when a write operation was performed. Subversion 1.7, however, will make this a manual step. Before using Subversion 1.7 with their working copies, users will be required to run a new command, svn upgrade to update the metadata to the new format. This command may take a while, and for some users, it may be more practical to simply checkout a new working copy.
— Subversion 1.7 Release Notes

TortoiseSVN will perform the working copy upgrade with the next write operation:

Upgrading the Working Copy

Subversion 1.7 introduces substantial changes to the working copy format. In previous releases, Subversion would automatically update the working copy to the new format when a write operation was performed. Subversion 1.7, however, will make this a manual step.

Before you can use an existing working copy with TortoiseSVN 1.7, you have to upgrade the format first. If you right-click on an old working copy, TortoiseSVN only shows you one command in the context menu: Upgrade working copy.
— TortoiseSVN 1.7 Release notes