i have noticed that eclipse recently creates a .settings directory with 1 file inside and i am wondering if i should add this to version control? SVN?
also, is this new?
The .settings folder is used by various plugins to set persistent 'Properties' as opposed to 'Preferences' to specify project specific settings that should be preserved.
This is usually a directory you most definitely want checked into svn/cvs/git etc as it will ensure that all users who check that project out into eclipse use the right project specific settings.
In our case we use it to supply a minimum compiler version of 5 since some devs are on Java 5 versus 6 etc but we want things compiled to 5 for our servers. We also use it to enforce some coding standards and auto-formaters which makes version diffs much easier to read.
In your specific case you selected 'Enable Project Specific Settings' under "Properties->Java Compiler" by right clicking on the project and choosing properties.