that index did the job, also reindexing, and getting rid of two other not quite often used indices helped a lot.
Now, this whole machine is fairly simple two way p4, with two sata discs in software raid 1 on linux. And it seems to spend loads of time (40-60% sometimes) on waits. I guess this is due to lack of aio support in postgresql, but still its times better from what it used to be on 8.1 (the machine is running 8.3).
