While performing db dump (from postgresql 8.4), pgAdmin stores CREATE LANGUAGE in following way:
CREATE OR REPLACE PROCEDURAL LANGUAGE plpgsql;
This syntax is not compatible with postgresql 8.4 OR REPLACE has been added in v9.0
pgAdmin doesn't create the dump file - it just calls pg_dump. Make sure you have the correct version of pg_dump in the directory pointed to by the PG Bin Path setting on File -> Options dialog.