Here are three easy steps to ignore the annoying Icon files when using SVN on Mac OS X:

1. Open up the terminal application and type:
   
cd ~/.subversion
nano config

2. In that file – find the line which starts with # global-ignores. The “#” comments out the line. Remove the # at the beginning of the line and add Icon* to the end of the line. We use Icon* because, the Icon file actually has a return at the end and we want to make sure we match it.
3. Save changes

Viola – no more issues with the Icon file!