No, you don't need to delete your user settings folder. The recent SVN change did not change anything that could break compatibility with old usersetting ini files.Thats because of your user settings svn update, i can delete these files but have i to set the options new then?
Confusion like this is what you get when insisting to play directly from your SVN folder.
Yes, that should be done every time you update your SVN (unless you know that the SVN update didn't touch any of the files that is within the PPIO modmod).And is it needed to recopy PPIO now?