indexes greatly slowing data entry

I'm having a problem with performance and indexing seems to be the cause. I
have a database with two tables with exactly the same structure. There are
two fields in each which I need to have indexed. One is a varchar(12), the
other a timestamp.

Data comes from another computer as an ASCII delimited text file at about
20,000 records per hour. Everything was fine until the database grew to
about 10 Gigabytes, then the computer could no longer keep up with putting
the data into the postgres database (using a perl script with DBI.) I found
that when I dropped one of the indexes on varchar, the problems went away.
It did not matter from which table I dropped the index.

With both varchar indexes in place, data for the table with the varchar
index created second would take 10 times as long to store data into compared
to the other table. From vmstat: blocks in (bi) is 10 times higher with
both varchar indexes when compared to with only one, and it looks like the
raid array is maxed out.

The indexes on timestamp did not seem to impinge on performance at all.
There is no swapping to/from disk going on. Can anyone help me figure out
what is the problem/solution?

I do an automated vacuum analyze nightly. Performance is not increased
afterward.

pg 7.0.3 on Red Hat Linux 7.1.

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