BUG #2749: Function's final statement must be a SELECT

The following bug has been logged online:

Bug reference: 2749
Logged by: Hagen
Email address: sixtus(at)gmail(dot)com
PostgreSQL version: 8.2beta2
Operating system: OSX
Description: Function's final statement must be a SELECT
Details:

create function test(text) returns table as $sql$
insert into table(value) values($1) returning *;
$sql$ language sql;

really should work now, instead I get:
PGError: ERROR: return type mismatch in function declared to return table
DETAIL: Function's final statement must be a SELECT.