I currently have an svn repository on my hosted web server. I work locally, commit my changes to the repository on my server, and then run an \"svn update\" via ssh in my live
As you already identified the best way to do this is using branching and tagging. A good example of how to do this would be as follows.
Major development
When you need to make a small change to live you can now do the following:
There is a really good fee book on subversion that explains this all in excruciating detail here:
http://svnbook.red-bean.com/
If you can find the time I'd strongly suggest a read.