I applied the most recent svn_versioning_2.patch to the dev06 setuptools branch, 
but ran into a recursion executing

easy_install 'svn://svn.eby-sarna.com/svnroot/AddOns#egg=AddOns-dev'

with subversion-1.6.2 installed.

The problem seemed to be that the checked out AddOns had an svn:externals for 
ez_setup, and listing that would recurse because the first entry returned by 
SVNEntriesText.get_undeleted_records() had a path of ''. So, I'm attaching a 
svn_versioning_3.patch that excludes an empty path. I'm really not sure if this 
is generally correct, but it does work for me.