Yes don't add it yourself to a SVN repo, but upload to the team server from the Modeler. Your colleague have to check-out the project from the team-server (again from the modeler) after you've done that. After that you can work together in the project file and Mendix will do the conflict handling.
What to you mean by Added to Tortoise SVN? A 3.x project does the SVN management for your.
But if you get a error when committing with the modeler you can do something like this:
The alternative, but trickier method is this. Instead of step 4 you do the following: