Cannot create UTF8 database - Mailing list pgsql-admin

I Have just installed version Postgresql-8.4.0 and when I run initdb -E utf8 it tells me that the current local (LATIN1 or rather LC_CTYPE) cannot accept the utf8. Then when I run initdb with the default local, I cannot create a utf8 database any way (be it in psql or pgadmin3).

Any hint?
I use Linux slamd64 12.2 (A Slackware dialect)

Thanks
Ibrahim Shaame