I know this is a late reply, but for what it's worth: I contribute/track about half a dozen large open source projects, all of which use revision control systems (cvs and svn). I have them all checked out into my eclipse workspace. I can't imagine having to do this with tarballs. Some people I know use revisioning not only for source code, but also for flat data files (I dabble in bioinformatics) and article manuscripts (latex). It's genius. Can a tarball tell you who did what, when, and why? The metadata you can get out of svn, from command line - but better yet if integrated in an IDE, is a godsend in collaborative projects. It keeps the managers happy also, what with all the neat graphs you can get out of it using fisheye or ohloh or something. Arguing against it is a losing battle, in my opinion.
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