Dear lazyweb, an svn question

An svn question, reposted here in the chance that one of my brilliant readers knows the answer:

From #svn on Freenode:

[10:29] Good morning, all you brilliant people.
[10:30] I’m attempting to checkout a versioned copy of a directory tree on top of an unversioned one. So, an installed product, and overlay that with versioned files – modifications to the installed product.
[10:30] Is such a thing feasible?
[10:30] When I try, I get “svn: Failed to add directory ‘application’: object of the same name already exists”
[10:30] The scenario is a custom build of a product for a customer, which consists of adding/modifying various files on top of an installed product.