Roberto,
As almost always, you're right😊!
A "createlang plpgsql template1" was what was missing. I don't recall ever having to do like that any time before, though...
So, it looks like PG 7.1.2 and 3.2.6 is fine. Sorry if it sounded like I raised the suspicion that it wasn't! But I still think it's weird that 3.3ad13 misbehaves from inittab. I will try 3.2ad12 with the same driver tomorrow.
PG 7.2 definitely have a bug at the moment, the way I see it and maybe someone being a member of the postgres mailing lists (as opposed to myself) will be nice and inform them, if it really is a bug that is?