Yeah, you need to give the full path, e.g.
svn import . file:///home/neversaint/subversion/Project1 -m "Initial i
Regarding the $EDITOR variable, you should set that to your favourite editor
then you can specify the subversion commands without the -m and have it call the editor for manual message entry automatically if you prefer. Add the line to .bashrc to have it done for you automatically when you log in.
Debugging is twice as hard as writing the code in the first place. Therefore, if you write the code as cleverly as possible, you are, by definition, not smart enough to debug it. -- Brian W. Kernighan