Hmm, I installed from the 7.1.2-4PGDG RPMs. I don't see the LC_ALL=C you're talking about -- do you mean in the /etc/rc.d/init.d/postgresql script?, and my postgres user has LANG=en_GB set. I have to manually initdb with LANG=C before it works.
Looks like there's a later set (-5PGDG) than the ones I installed, I wonder if these have been 'fixed'.
