Apparently the .svn/format file is needed by SVNKIT in 7.0.4
I've just updated Tortiose which does not now add the format file (apparently this is by design: http://tortoisesvn.tigris.org/ds/viewMessage.do?dsForumId=4061&dsMessageId=1515106)
I've read you can update the SVNKIT in 8.x.x here:
(Had to use cached version from google as original has vanished).
But it doesn't work in 7.0.4 - can anyone help?