Had a situation today where we were trying to check out a SVN repository and kept getting
Check Out: Cleanup with an older 1.7 client before upgrading with this client
both with SmartSVN and the OSX command line svn – into a new clean directory.
The problem turned out to be an old .svn metadata folder in the directory above which should have been deleted when rearranging folders. This seemed not to affect existing working copies below this, but it looks like it did cause problems with creating new working copies. Deleting the rogue .svn directory made things work.