i've fixed the problem on my system, and even made it unnecessary for me to sudo in the /var/lib/aolserver/service0/etc/daemontools/run command - which should be good for security. All i need to do is add sleep before the process (which seems to give nsd enough time to fully shut itself down before daemontools restarts it). So now my run file looks like this:
#!/bin/sh
sleep 1
exec /usr/local/aolserver/bin/nsd-postgres -it /var/lib/aolserver/service0/etc/config.tcl -u service0 -g group0 -b 192.168.0.XXX:80
