Rafael, the message about "or" makes me think you don't really have 7.2.1 ("create or replace" should be valid syntax for 7.2.1). Can you
do "select version();" from psql and confirm that it is really 7.2.1...
I committed a fix for the security create problem
"cvs update dotlrn/sql/postgresql/security-create.sql" to get it.