In 7.4 there is an optional BY that are allowed in the definiton of 
sequences:
CREATE [ TEMPORARY | TEMP ] SEQUENCE namn [ INCREMENT [ BY ] ökning ]   [ MINVALUE minvärde | NO MINVALUE ] [ MAXVALUE
maxvärde| NO MAXVALUE ]   [ START [ WITH ] start ] [ CACHE cache ] [ [ NO ] CYCLE ]
 
(some swedish strings there, but still readable for you)
pg_dump uses this optional keyword BY which seems like a bad idea if one 
wants to import it into a 7.3 database. Use the 7.3 dump you might say, 
but since BY does not do anything why not remove it from the dump output?
-- 
/Dennis Björklund