We have setup (or at least trying) a team SVN server.
If a colleague of mine selects 'override and update' will it then pushed IMMEDIATELY to our DE.org?
I am assuming you are using an Eclipse plugin in order to do this. If you have the 'build automatically' button checked, then it should immediately push to your dev org. Sometimes when it does the push it will get out of version errors though and might need manually pushed again by yourself.
It's helpful to have more additional info, such as what IDE you are using or what plugin/client you are using for SVN to give more accurate answers.