the wiki explains it VERY WELL here :
http://amsn-project.net/wiki/SVN#The_Subversion_way_3and we didn't put up the wiki so that we reexplain everything.. if you can't figure it out by reading the tutorial, you won't be able to make it work since you'll need to resolve dependencies and compile....
don't just look at 'how to update', you must first follow the steps described above...
and your error is that you don't even have the 'subversion' program installed, you need that too...
then read this :
http://amsn-project.net/wiki/Dev_Packagesthen read how to get the SVN version, if you don't want to install subversion, then use the amsn_dev.tar.gz method, but updating will require you to download the whole archive again everytime...
if you can't get it to work, then wait for the 0.97 release to be out, it should take maybe a month before it's out.
EDIT : to answer your edits.. you don't need to be in either of those directories, you need to get amsn into a new directory then install that one, the 'svn update' works only with the svn version AFTER you fetched it, and it will work on the source folder, not the installed folder.