Oops, broken link in my previous post. The doc is at
I just looked and I'm now sure it doesn't recommend installing PG 7.0.x anywhere in it. So that's definitely the issue you are facing.
Somehow, accidentally or otherwise, you (or someone else with root access to your machine!) managed to install PG from your Red Hat CDs, and it is now getting in the way.
BTW, in case you ever actually started it up inadvertently too, you may want to do
/bin/rm -rf /var/lib/pgsql
after you do the rpm -e command I suggested earlier.