Postgres locking

I'm trying to use select for update locks in Postgres. When I do this:

begin work;
select data from table where key = 1 for update;

in two psql's running simultaneously, about half the time the second
transaction blocks and waits for the first to end (which is what I want
it to do), the other half the time I get this:

ERROR: XactLockTableWait: LockAcquire failed

and the transaction is aborted. I can't find any pattern, if I do the
same statements in the same order several times, it will be block one
time and error the next apparently at random. I also tried using LOCK
TABLE and found the same basic problem, sometimes the second
transaction will block, other times it will abort with:

ERROR: LockRelation: LockAcquire failed

Do I have a configuration problem? Is this a bug in Postgres? I'm
still running 7.2.1, would upgrading to 7.3 fix this?

Thanks!

Bob Smith
Hammett & Edison, Inc.
bsmith(at)h-e(dot)com