Is there a free version control server provider for non-public projects?
Are there free online repositories suitable for university team projects?
As it's a school project, it's not really open source (at least not until after the term is over).
You should check out bitbucket if you're interested in using Mercurial; the free plan may not exactly satisfy your requirements, but it's a terrific site. And if you decide to pay for the extra features, it's pretty cheap.
Find some network/FTP space and then just use Bazaar. You'll never go back to SVN after using Bazaar (at least I didn't). I hear GIT is also pretty nice. And really, it should hardly be any effort to learn Bazaar with the simplicity of the interface and all the docs/tutorials around.
I would say Freepository. See: Freepository.com
The free version has CVS - Server with 300MB Disk space.
For 8$ per developer you get 1GB, SVN, TRAC, ANT , etc.
I know you said it's not open source, but is that a "must" ? Sourceforge is good with a good track record, and I imagine it would suit your needs.
I'm using http://xp-dev.com
It's completely free for private projects, with unlimited repositories and 1500MB.