On Tue, 26 Nov 2002 pgsql-bugs@postgresql.org wrote:
> Marcus Andersson (maran@fyrplus.se) reports a bug with a severity of 2
> The lower the number the more severe it is.
>
> Short Description
> upper() does not handle �, � and � correctly.
>
> Long Description
> The function upper() just leaves the letters �, �, and � unmodified.
> It should replace them with �, � and � respectively.
>
> PostgreSQL version 7.2.3 on Solaris.
>
> I am using encoding 7 (ISO 8859-1).
It's probably a locale issue. What locale did you initdb in?