if you follow the assumption in "Designs directory" i.e. you are going to have more then one design then you should go one level up. I'm suggesting that each design.dmd file and related design directory are located in separate directory:
- ...\trunk\project1 directory at server should contain only - file proj1_des.dmd and directory proj1_des .
Then you should checkout ....\trunk\project1 directory as sub directory of your local "Designs Directory"