Thanks for tracking this down. If by some chance you're up for a grep session it would be nice to track down any inserts that use this hack.
And if someone has time for 4.6 I think we should retire the hack entirely though writing the proper upgrade scripts to set a new sequence with the right name to the right value would be awfully tedious (we'd probably want to retire the "t_sequence_name" sequences, too).
This is one of those hacks that seemed a beautiful crutch at the time Dan Wickstrom proposed it, but turned out to be a not so great idea. We've been using it from the first OpenACS 3 and PG 6.5 days. That's how much we all liked it.
The bottom line in PostgreSQL is that we can't depend on the view being evaluated more than once in a query. Nor can we depend on it being evaluated only once, unfortunately.
The insert queries you're describing worked fine in PG 7.1 but failed in PG 7.2. But they only *appeared* to work. It was an optimizer choice and in PG 7.2 the view only gets evaluated once due to some tweaking of optimizer cost estimates.
There's a PG bug here but I've not been able to get the PG team to acknowledge it. However I *have* determined that the current PG 7.2 behavior is correct - a view should only be evaluated once, pure and simple. The remaining PG bug is that it still will evaluate such views more than once in certain queries that return multiple rows (just not simple inserts like this).
Lesson of the story - views that generate dynamic values such as the sequence hack views are a bad idea in PG because the behavior's unpredictable. In standard SQL 92 such views aren't going to do what one hopes anyway. Two good reasons to avoid them in the future.
But we didn't know that 'way back when! I, at least, learned a bit about SQL 92 and PG and PG team politics in the process of figuring all this out.