It seems that there is a problem with Subversion 1.4.x running on Windows 2008 Server. Specifically svnserve.exe throws an exception when run either manually or as a service. This happens for all editions of Windows 2008 server, in both x86 and x64 versions.

I was able to get the 1.5 version (RC5) of svnserve.exe to run on Windows 2008 server. I used the CollabNet version of 1.5. Be aware that CollabNet bundles the binaries in different directories than the Tigris.org packages.

I came across this problem because I'm updating my servers in my private network. I thought others might find this information useful.