Dumping and reloading stuff in 6.5.3

Hi,

What is the recommended way to reload a database in 6.5.3?

Right now I tried something like:
psql -f testfile -u test > /dev/null 2>&1
(then enter username and password, and wait)
(testfile is a dump of a 36MB database)

And I think it works, but while it is running it affects the performance of
other unrelated databases severely. Should this be happening? Top only
shows four or so backends running, but the webapps are like grinding down
to 20 seconds or more per page. Normally our webapps can do 12 hits/sec or
so, so such a drastic drop is surprising. This is on a PIII 500MHz 512MB,
SCSI 9GB HDD system.

Also when I did a 30MB psql level copy (\copy) into a test database and
table, somehow the performance of _other_ databases was bad until I did a
vacuum (which took ages). This was rather surprising.

I'll probably switch to 7.0 soon and see if the issue crops up. I hope
copies are much faster in 7.0. Should I turn off fsync when doing bulk
copies? I'm worried that if the backend crashes duing the copy, the other
databases may get corrupted.

Any comments?

Thanks,
Link.