I had the same problem and none of the solutions mentioned resolved my problem. When I right-click on the folder, there was no permission to resolve the conflict or mark it as resolved or any other.
As I enabled it in Eclipse (with the Subclipse plugin), I right-click on the folder and select "Show Tree Conflicts". This opened a view pane in Eclipse called "SVN Tree Conflicts", which showed this folder.
I right-clicked this message and selected "Resolve". Then a window appeared asking what I want to do. I basically unchecked all the boxes associated with accepting a left file or file or merge. Because basically, I just wanted to mark the conflict as resolved and accept the folder as is, from the repository.
Then I was able to continue updating my project without any problems.
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