[Beginner] Which local directory should be used?

I've developed for a few years, but never used svn until now.  I'm beginning to see the amount of work and headache I could have saved in years past, had I learned this previously.

After installing RapidSVN on my Ubuntu 10.04 system, I followed instructions to create a repository using svnadmin through command line.   

Next, I imported files into this repository using the GUI (using Repository -> Import).  I selected the path to import from an existing development directory, and entered the repository path I previously set up.  This worked fine.

Finally, I selected Repository -> Checkout, entering the repository path and new local working folder.  This also appeared to work fine.

I created bookmarks for the Repository and Checkout directories.

Both directories that appear to have the same imported files.  One is the repository folder (file:///storage/web/svn/mysite) and the other is the checkout folder (/storage/web/sites/mysite) I selected during Checkout. 

When making a change to a file in the checkout folder (above), Rapidsvn shows 'modified' beside the file in the Checkout folder, along with an increased Revision count of 2.   

The same file, when viewed in the Repository folder, also has an increased Revision count of 2, but does not show 'modified'. 

My question is, which directory should I be editing from, and which directory should I use as my local SFTP folder?  

Apologies if I've not explained this well.  Please feel free to follow up if I need to clarify something.  

Very interested in making sure I am using this package correctly.

Thanks, 
Adria

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