You get the "database postgres does not exist" error because you're calling psql by itself. Let me be more detailed... I was in a hurry when I posted the last response:
(assumming your data will reside in /usr/local/psql/data). Stop postmaster before doing this.
(as user postgres)
/usr/local/pgsql/bin/initdb -D /usr/local/pgsql/data
/usr/local/pgsql/bin/postmaster -S -D /usr/local/pgsql/data
createuser youruser
su - youruser
createdb yourdb
psql mydb
Where 'youruser' is the user AOLserver will connect to PG and 'mydb' is the name you're giving to the database.
Sorry about this mistake in the documentation.
