My Subversion/Trac server was at Trac v0.9.6 and Subversion v1.3.x because those were the latest stable releases when I set up the server. I decided it would be relatively quick and painless to at least get the latest version of Subversion (v1.4.5) installed since I didn't see anything on the web about Trac v0.9.6 being incompatible with newer Subversion builds.
Using the Windows binary installer, I had no problem installing Subversion v1.4.5 on the server. I tested everything and Subversion still worked, it showed the new version when accessing via web access, and Trac still worked fine.
Alas: Don't forget that an upgraded version of Subversion will not upgrade your repository. It will upgrade a working copy of a checked-out repository, but it will not upgrade the repository itself.
That said, I was unaware of one more step that you must take to upgrade Subversion on a Subversion/Trac setup: You must also upgrade the Python bindings to Subversion.
This became apparent the next time I created a new repository, which was not a v1.4.x repository, and when I tried to build a Trac environment to point to it, Trac got upset because of the classic "Expected version '3' of repository; found version '5'" error. To fix this, you must set up new bindings to the new version of Subversion, as explained in the TracSubversion page.
Now, I obviously love Subversion and I love Trac, but honestly, straight-forward documentation that is easy to understand for someone who doesn't want to get in the thick of it isn't really the strong suit for these communities, at least when it comes to installation and deployment on the server. What exactly it means--and how to do it--when they say, "Update the Subversion bindings" is not easy to understand. However, the solution is simple. All that is needed is to download the appropriate "svn-python" Windows installer that matches your version of Subversion and Python (in my case, 1.4.5 and py2.3) and run it on the server.
In my case, I had to stop Apache for the installation to succeed. Upon restarting Apache, everything worked great.