If you'll excuse me for asking a stupid question, do you have subversion? Does it work properly?
I got this error recently when I forgot to edit PATH, which apparently I need to do for the mac client to work
The command I use is:
PATH=$PATH:/usr/local/bin
export PATH
if I recall correctly. I need to do this every time I login until I can be bothered to alter the somethingorother file.
But that's just me. If you don't use a mac, it's unlikely to be the same problem.
edit - having reread the thing you posted it looks like you use windows (I think, not much experience). It won't be the same problem but it might be similar. Do a test to make sure subversion is working.