[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.   I have a question about how to use SVN.

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

Finally, I created bookmarks for the Repository and Checkout directories.
One points to the repository folder (file:///storage/web/svn/mysite) and the
other points to the checkout folder (/storage/web/sites/mysite) 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.

But, 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 (above, the
Checkout or Repository folder), and which directory should I use as my local
SFTP folder, from which I upload 'checked in' files to the web server?

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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