A dummy explanation of svn:externals could be that it allows a developer to link a folder from their repository to another location, say the Zend Framework repository. So this way when you want to upgrade the framework or get the latest incubator classes you can just do an svn update (probably after changing the externals location depending on your setup).
svn:externals - phly, boy, phly has a simple example of svn:externals for those who do not know how to use it. A note though, in the example he uses the trunk, it is suggested that you use a release from the tags folder so that you get a stable snapshot.
Here is the more indepth manual:
Externals Definitions