In Mac OS 10.6 Apple replaced contextual menu plug-ins with enhanced services, which will show up as contextual menu items. The problem is that the services are static (each item is described in application or service plist) so developers cannot create a service that will dynamically add its own menu items. Also, CM plug-ins analyze the context information to display appropriate menu items or not display at all. With services, it is Mac OS X that makes the decision whether to show the service item or not based on the data types that the given service advertises it can handle.
You can expect some simpler contextual menu plug-ins to migrate to services mechanism for Snow Leopard in the near future. The more complex plug-ins are unfortunately out of luck. It is a big loss for people who learned to rely on existing CMs in their workflow. It will take time for alternative solutions to be developed.
Jack Repenning, the SCPlugin project owner over at Tigris, has suggested a number of workarounds/solutions.
One is to be a good citizen (as Apple defines and redefines and redefines how apps can and should exist) and switch to using the Services Menu. This would bury the functionality one more level deep, reducing utility/ease/visibility for novices and pros alike), and would further deteriorate SCPlugin's utility, and EasySVN's proposed utility, by not allowing feedback & menu intelligence when presenting the menu's contents (say, displaying different options in the menu, per svn, depending on what file or folder is currently selected). Implementing in the Services menu would mean settling for poorer utility than previous versions of SCPlugin, and is therefore unpalatable within the community.
NomaDesk employs their version of this sort of functionality like a good Apple citizen: via the Services menu during a Finder file selection contextual menu. But DropBox has figured out how to do both badging and inserting themselves into the Finder's contextual menus in a prominent way, as is desired for SCPlugin. So it is possible.
The issue is significant, with potential pre-processing workarounds I am able to discuss further.
DropBox's technique (to modify the Finder CM) is to use SIMBL plugins, code injection and Objective-C method swizzling. There are a number of implementations, but this one appears the most promising: