That looks to me like the installer can't find psql to execute it. You
might want to check that the pgbin parmeter in your init file is
correct.
# section added for openacs 4.x - no longer needed
ns_section ns/db/driver/postgres
ns_param pgbin /opt/pgsql-7.1.2/bin/
Disregard the "no longer needed" comment in the init file... :)