Sorry for not getting back to you sooner.
Yes, SQL Source Control should work with VisualSVN Server. It is not an officially supported server in that we haven't tested against this, but all we expect is that the subversion server we are communicating with adheres to the standard subversion behaviours. I would be surprised if VisualSVN Server didn't do that.
We support subversion 1.5 and 1.6. As long as you have version 1.5 or greater of VisualSVN Server you should be fine. If not, please let us know!
I've run a quick test here and managed to link and commit to a VisualSVN repository ok.
Have you made sure that the folder in the repository that you are specifying on the link dialog is completely empty? It mustn't contain any files or subfolders.
If you are still having problems, please post back or email firstname.lastname@example.org
and we'll help you to work through this.