Usually the root is at http://servername/svn/repositoryname. I think there are some known problems when you have the repository in the root (ie when your URL is what you describe, and the name of the repos is 'svn').
Edit: This means there's no level above /svn/proj1/
as far as Subversion is concerned. It is also impossible to move (with keeping history) items from /svn/proj1/
to /svn/proj2/
. I think that you've been too active creating repositories, causing problems when trying to reuse items frome one repository in the other. See a discussion about multiple repositories vs a single one, and the faq entry on how to merge multiple repositories into one.
You might want to take a look at externals if you want to re-use part of the proj1 repository in the proj2 repository.