I've run into a problem with Hudson where svn:externals appear to be checked out during a build, but when I examine the working directory the externals aren't actually there. The following is output from one of my failed builds:
So it appears as though the external is checked out, however upon examining the working directory (directly and via extra lines in the running script) the external is not actually there.
Here is the definition of the external property on http://repo/svn/vwc_repo/ShellScripts/trunk/softsys:
Using SVN 1.6 I can check out the same directory and the external is properly retrieved.
I have the Subversion Workspace Version set to "1.6 (svn:externals to file)" and have the workspace cleaned on every build.