1.7RC4 file externals produce errors on updates

When I try to update a working view that contains file-externals, I get
an error because the client thinks the external is a versioned item.

In an attempt to clear the problem, I deleted the file (locally), but
"svn up" restores the file and then complains about it existing.

Are file-externals supported in v1.7?

$ svn up
Updating '.':
Restored 'lastserial.txt'

Fetching external item into 'lastserial.txt':
svn: warning: W195017: The file external from
'https://[snip]/trunk/SerialNumbers/lastserial.txt' cannot overwrite the
existing versioned item at '/c/[snip]/lastserial.txt'

At revision 3905.
svn: E205011: Failure occurred processing one or more externals definitions
Received on 2011-10-04 19:15:42 CEST