We run our own private development servers.  We do not give repository
access to clients, but instead post a fairly regular (usually agreed
in advance to be weekly or bi-weekly) 'psudo-production' or beta-
version of the code for them to look at and play with.  Basically,
anytime we do a tag of the trunk, we zip it up, send them the source,
and then put it up for them to play with.  They've always got the
[nearly] latest source and can easily gauge our progress, but can't
interfere with our operation or criticize our methods.

The key is that YOUR job is managing the source code.  That's what
programming is all about, so those aren't details that the clients are
privy to (and, in every client I've ever worked with, they didn't WANT
to have up to the minute access to what's going on).