I had the same problem caused by attempting to install flex builder 3 plugin on the Gallileo release of Eclipse. Reverting back to Ganymede the problem persisted in the workspace. It was also very annoying 'cause my current workspace has about 16 projects the majority of which had this issue. I've succesfully got things back up and running and subversion behalving properly and up to date. I used the method decribed above and renamed the .marker files in all of the affected projects. I'm concerned though about the ramifications of doing this.
Does anyone know clearly what purpose(s) these .marker files serve, or can someone point me to the documentation that would explain?
I also got this problem by using Flex Builder 3.2 in Eclipse Gallileo (3.5.1). Going back to Eclipse 3.4.2 and reinstalling Flex Builder did _not_ fix the problem. Deleting the .marker files in the .metadata folder of the workspace (as described by another poster) was the only way I could fix it. Presumably, creating a new workspace and getting from source control again would also fix it because the new workspace would not have .marker files yet.