A very helpful blog about this topic can be found at:
http://www.saltycrane.com/blog/2007/03/how-to-setup-subclipse-project-to/
In summary, always "share" your new project to a aaa/trunk directory on SVN repository. If this is an existing project, then you can use the "move" operation under SVN repository page in eclipse to manually move your existing project into such a manually created trunk folder.
To create a branch from trunk, use "team" -> "branch/tag..." to copy your trunk version into a branch version. Give a name to your new branch, such as "../myproject/branches/newbranch".
The nice thing about branch is, we can now easily go to branch version and work on it without affecting anything in our trunk version. To switch to the newly created branch, simply go to "team"->"switch to another branch/tag...".