I switched to subversion a while ago just for ease of branching and merging. But, I also needed compatibility with CVS-based hosting services (like SourceForge), so I wrote svn2cvs. With cvs2svn and this tool I made successfull transition to subversion.

Vendor branches in subversion are just directories. Basic principle is following: You have version 1.0 of vendor (upstream) branch. You do copy (which is cheap in subversion) to your trunk (current working tree). When vendor release version 1.1, you do merge. Subversion will diff vendor version 1.0 and 1.1 and apply changes to your working tree. If there are conflicts, you will get original file, left and right merge, just to make it easier. All that is described in much more details in subversion book.

I must also warn you: if you try subversion branches, you won't be able to go back to CVS :-)