Recent 7.4 change slowed down a query by a factor of 3

The query below was running in a bit under 300ms on a version of 7.4
from less than a week ago until I updated to the version from last night.
Now it takes about 800ms using a significantly different plan.
The query is:
explain analyze
select count(1)
from
(select distinct on (areaid) touched
from crate
order by areaid desc, touched desc)
as current
where touched >= localtimestamp + '10 year ago'
group by touched >= localtimestamp + '2 year ago'
order by touched >= localtimestamp + '2 year ago' desc;

I don't have the earlier version of 7.4 around, but I get the better plan
in 7.3.3.
version
------------------------------------------------------------------------
PostgreSQL 7.4devel on i686-pc-linux-gnu, compiled by GCC egcs-2.91.66
(1 row)

QUERY PLAN
---------------------------------------------------------------------------------------------------------------------------------------
Sort (cost=1756.33..1756.50 rows=67 width=19) (actual time=795.64..795.65 rows=2 loops=1)
Sort Key: (touched >= (('now'::text)::timestamp(6) without time zone + '-2 years'::interval))
-> HashAggregate (cost=1753.46..1754.30 rows=67 width=19) (actual time=795.48..795.48 rows=2 loops=1)
-> Subquery Scan current (cost=1624.62..1737.38 rows=3216 width=19) (actual time=631.84..784.75 rows=5339 loops=1)
Filter: (touched >= (('now'::text)::timestamp(6) without time zone + '-10 years'::interval))
-> Unique (cost=1624.62..1705.22 rows=3216 width=19) (actual time=631.72..713.66 rows=5364 loops=1)
-> Sort (cost=1624.62..1664.92 rows=16119 width=19) (actual time=631.72..639.77 rows=16119 loops=1)
Sort Key: areaid, touched
-> Seq Scan on crate (cost=0.00..498.19 rows=16119 width=19) (actual time=0.02..48.85 rows=16119 loops=1)
Total runtime: 800.88 msec
(10 rows)

Table "public.crate"
Column | Type | Modifiers
---------+-----------------------------+------------------------
areaid | text | not null
gameid | text | not null
rate | integer | not null default 5000
frq | integer | not null default 0
opp | integer | not null default 0
rmp | integer | not null default 0
trn | integer | not null default 0
rp | text |
gm | text |
touched | timestamp without time zone | not null default 'now'
Indexes:
"crate_pkey" PRIMARY KEY btree (areaid, gameid),
"crate_game" btree (gameid, areaid),
"crate_touched" btree (areaid, touched)
Check Constraints:
"rate_nonnegative" CHECK (rate >= 0),
"rate_other_interested" CHECK ((frq > 0) OR (rate = 5000)),
"frq_nonnegative" CHECK (frq >= 0),
"opp_nonnegative" CHECK (opp >= 0),
"rmp_nonnegative" CHECK (rmp >= 0),
"trn_nonnegative" CHECK (trn >= 0)
Foreign Key Constraints:
"bad_areaid" FOREIGN KEY (areaid) REFERENCES cname(areaid),
"bad_gameid" FOREIGN KEY (gameid) REFERENCES games(gameid)

version
---------------------------------------------------------------------
PostgreSQL 7.3.3 on i686-pc-linux-gnu, compiled by GCC egcs-2.91.66
(1 row)

QUERY PLAN
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Sort (cost=1094.46..1094.87 rows=161 width=19) (actual time=274.17..274.18 rows=2 loops=1)
Sort Key: (touched >= (('now'::text)::timestamp(6) without time zone + '-2 years'::interval))
-> Aggregate (cost=1076.46..1088.55 rows=161 width=19) (actual time=263.78..274.09 rows=2 loops=1)
-> Group (cost=1076.46..1084.52 rows=1612 width=19) (actual time=255.12..269.69 rows=5339 loops=1)
-> Sort (cost=1076.46..1080.49 rows=1612 width=19) (actual time=255.11..258.09 rows=5339 loops=1)
Sort Key: (touched >= (('now'::text)::timestamp(6) without time zone + '-2 years'::interval))
-> Subquery Scan current (cost=0.00..990.59 rows=1612 width=19) (actual time=0.12..240.81 rows=5339 loops=1)
Filter: (touched >= (('now'::text)::timestamp(6) without time zone + '-10 years'::interval))
-> Unique (cost=0.00..990.59 rows=1612 width=19) (actual time=0.04..159.11 rows=5364 loops=1)
-> Index Scan Backward using crate_touched on crate (cost=0.00..950.30 rows=16119 width=19) (actual time=0.04..82.15 rows=16119 loops=1)
Total runtime: 275.32 msec
(11 rows)

Table "public.crate"
Column | Type | Modifiers
---------+-----------------------------+------------------------
areaid | text | not null
gameid | text | not null
rate | integer | not null default 5000
frq | integer | not null default 0
opp | integer | not null default 0
rmp | integer | not null default 0
trn | integer | not null default 0
rp | text |
gm | text |
touched | timestamp without time zone | not null default 'now'
Indexes: crate_pkey primary key btree (areaid, gameid),
crate_game btree (gameid, areaid),
crate_touched btree (areaid, touched)
Check constraints: "trn_nonnegative" (trn >= 0)
"rmp_nonnegative" (rmp >= 0)
"opp_nonnegative" (opp >= 0)
"frq_nonnegative" (frq >= 0)
"rate_other_interested" ((frq > 0) OR (rate = 5000))
"rate_nonnegative" (rate >= 0)
Foreign Key constraints: bad_gameid FOREIGN KEY (gameid) REFERENCES games(gameid) ON UPDATE NO ACTION ON DELETE NO ACTION,
bad_areaid FOREIGN KEY (areaid) REFERENCES cname(areaid) ON UPDATE NO ACTION ON DELETE NO ACTION