Friends thank you all for replying, but I do not think you understood what I said. I did not try to upgrade the database. I uninstalled the old one and tried a clean install of the PostgreSQL 8.1.0-2.
If anything this should have worked, but it did not.
There is no reason for the installer to behave like that. That is why I am so pissed off and dissapointed.
If anyone can solve this problem, please tell me. Otherwise I will have to ditch PostgreSQL and go for another database, which currently I am not very keen on doing.
I am not asking for much. Just a descent installer to be able to install the DB and do my work.