PostgreSQL now() function returns incorrect time

I was wondering if somebody could point me in the right direction.
I'm situated in Brazil and recently daylights savings/summer time kicked in
and clocks were set one hour ahead. Now on my windows box the system clock
automatically adjusted to the correct time. But performing the following
query on the postgresql-8.0 server i get this result:
select now()
----------------------
2005-11-09 13:22:27.625-03
while the actual current time is 14:22h, and being reported correctly in
the windows system clock
I have tried finding some information in the documentation and came across
locale settings in the postgresql.conf configuration file but Im not sure if
this is the correct place to be looking. Should i set the timezone property
in postgresql.conf to something other than unknown?
any help would be appreciated,
giovanni

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