Functions in PostgreSQL 7.2 (in 3rd beta right now) can return a cursor, which is equivalent to returning a relation. That should make working with Oracle <->PostgreSQL a lot easier.
7.2 also supports using the Oracle-style %TYPE in the declaration of parameters. Another win with working with Oracle.
Tom Lane did a nice job clarifying some obscure points of PL/pgSQL in the (now much better formatted) 7.2 documentation for PG's procedural languages: http://candle.pha.pa.us/main/writings/pgsql/sgml/plpgsql.html