function performance vs in-line sql

I am having a performance problem with a query implemented within a
server side function. If I use an SQL client(EMS Postgres) and manually
generate the sql query I get about 100 times performance improvement
over using the function.

I've also tried using a prepared statement from my application and
observed a similar performance improvement over the the function.

The table I am quering against has several hundred thousand records. I
have indexes defined and I've run vacuum several times.

Is there something basic I am missing here with the use of a function. I
am no database expert, but my assumption was that a function would give
me better results than in-line sql.

I've seen a mailing list entry in another list that implied that the
query planner for a function behaves differently than in-line sql.

Thanks
Karl