initdb failure on Windows XP

I am using PostgreSQL 8.3 on Windows XP SP2.

I am getting this strange error while initdb:

Part of the error message i get,

The database cluster will be initialized with locale English_United
States.1252.

The default database encoding has accordingly been set to WIN1252.
The default text search configuration will be set to "english".

fixing permissions on existing directory C:/postgres/data ... ok
creating subdirectories ... initdb: could not create directory
"C:/postgres": File exists
initdb: removing contents of data directory "C:/postgres/data"

Looking into the initdb code, it should create sub directories (global,
pg_xlog, pg_clog, base etc ) under directory C:/postgres/data. I cannot
understand, why it is trying to create "C:/postgres".

Any thoughts?

--
Regards,
Sachin Srivastava
www.enterprisedb.com