The source?
 

The guides dont explain this too well... right now I basically have my server up and running just using Rev946 of the PEQDB.

What am I supposed to do with the SVN file? This is the source correct? How should this be set up correctly and what will happen if I dont have it set up... it seems my server works fine?

Subversion (SVN) is a source control system. You can use a subversion client to connect to the server and download a copy of the source. Once you have the a copy of the source you can modify it to add custom behavior or fix bug or compile the binaries from the latest source. If you are not a programmer or are not planning on modifying the code at all you don't need to do anything.