In the most general sense, Subversion handles binary files more gracefully than CVS does. Because CVS uses RCS, it can only store successive full copies of a changing binary file. Subversion, however, expresses differences between files using a binary-differencing algorithm, regardless of whether they contain textual or binary data. That means that all files are stored differentially (compressed) in the repository.
CVS users have to mark binary files with -kb flags, to prevent data from being garbled (due to keyword expansion and line-ending translations). They sometimes forget to do this.
Subversion takes the more paranoid route—first, it never performs any kind of keyword or line-ending translation unless you explicitly ask it do so (see «svn:keywords» and «svn:eol-style» for more details). By default, Subversion treats all file data as literal byte strings, and files are always stored in the repository in an untranslated state.
Second, Subversion maintains an internal notion of whether a file is «text» or «binary» data, but this notion is only extant in the working copy. During an svn update, Subversion will perform contextual merges on locally modified text files, but will not attempt to do so for binary files.
To determine whether a contextual merge is possible, Subversion examines the svn:mime-type property. If the file has no svn:mime-type property, or has a mime-type that is textual (e.g. text/*), Subversion assumes it is text. Otherwise, Subversion assumes the file is binary. Subversion also helps users by running a binary-detection algorithm in the svn import and svn add commands. These commands will make a good guess and then (possibly) set a binary svn:mime-type property on the file being added. (If Subversion guesses wrong, the user can always remove or hand-edit the property.)
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