If the user's environment is set to an unknown locale when launching netbeans, svn working copies fail to convert to this encoding. However, netbeans reports that the code was checked-out using an out of date svn client, and that it should be re-checked out with a newer version before it can be properly recognised.

This is misleading, as the problem is actually due to the conversion failure (or, presumably, any other svn exception of this level), and doing the above will not fix the issue.

ps.
This happened to me when setting my locale to "C", which it turns out is invalid on my setup.