You should encrypt the data pipe (ssl/ssh) instead, and secure the access to the server. Encrypting the data would force SVN to essentially treat everything as a binary file. It can’t do any diff, so it can’t store deltas. This defeats the purpose of a delta-based approach.
Your repository would get huge, very quickly. If you upload a file that’s 100kb and then change 1 byte and checkin again, do that 8 more times (10 revs total), the repository would be storing 10 * 100kb, instead of 100kb + 9 little deltas (let’s call it 101kb).
Update: @TheRook explains that it is possible to do deltas with encrypted repository. So it may be possible to do this. However, my initial advice stands: it’s not worth the hassle, and you’re better off with encrypting the ssl/ssh pipe and securing the server. i.e. “best practices”.