Custom C function - is palloc broken?

First off, I am developing custom c functions for PostgreSQL 8.3 in
Windows (sorry... not my choice). It appears that there is some
underlying problem in the server that is causing a runtime error to
crash the server when I use palloc. For example... I run the
following:

PG_FUNCTION_INFO_V1(add_one);
Datum
add_one(PG_FUNCTION_ARGS)
{
int32 arg = PG_GETARG_INT32(0);
PG_RETURN_INT32(arg + 1);
}

and it works just fine. NOTE: this is directly from the tutorial
directory. Now, when I add a palloc statement in there it crashes:

PG_FUNCTION_INFO_V1(add_one);
Datum
add_one(PG_FUNCTION_ARGS)
{
int32 arg = PG_GETARG_INT32(0);
palloc(sizeof(Point));
PG_RETURN_INT32(arg + 1);
}

Running "SELECT add_one(1);" crashes the server. The logs show this:

2008-05-03 21:29:08 MDT LOG: server process (PID 3008) was terminated
by exception 0xC0000005
2008-05-03 21:29:08 MDT HINT: See C include file "ntstatus.h" for a
description of the hexadecimal value.
2008-05-03 21:29:08 MDT LOG: terminating any other active server processes
2008-05-03 21:29:08 MDT LOG: all server processes terminated; reinitializing
2008-05-03 21:29:09 MDT FATAL: pre-existing shared memory block is still in use
2008-05-03 21:29:09 MDT HINT: Check if there are any old server
processes still running, and terminate them.

I also get the exact same error when I try to run either the copytext
or concat_text functions from the same funcs_new.c file in the
tutorial directory. This essentially means that I cannot write any
UDFs that require memory allocation or text parameters. Heron seems to
be experiencing the same thing. Is this a bug in 8.3? Can anyone help?