Mark Karpeles found a problem when he updated his Subversion install to the latest in the 1.6.x series - an XML error about opening the filesystem.
After some searches I found someone who had the same problem, and fixed it. Basically the problem is due to the SQLite version embed into PHP 5.2.x. PHP includes SQLite 3.3.7 while SVN will usually depend on 3.6.15 (or whatever you have on your system).
There's three solutions to the issue - disable PHP, update SQLite or create a new repository with the "-pre-1.6-compatible" flag to make it all play nicely together.