I have tried this on a fresh pg-7.2.1 install. Maybe, it works for you due to the upgrade. Can someone else check it on a fresh install? David, have you restored your dumped data by using template1 or each database separately?
template1=# select version();
version
-------------------------------------------------------------
PostgreSQL 7.2.1 on i686-pc-linux-gnu, compiled by GCC 2.96
template1=# select 0 < 2^7;
?column?
----------
f
(1 row)