Implicit Transactions and Rolling Back

We are porting from Informix to PostgreSQL 7.4.5 and have noticed the
following behavior.

If we try to OPEN a CURSOR for an invalid SELECT statement in ECPG, we
get an error, as expected. However, if we then attempt to OPEN another
CURSOR for a valid statement,
we get an error that says we are in a failed transaction. At that
point, no statement will succeed.
The only way we have found to get out of this state is to ROLLBACK
explicitly.

We are not using explicit transactions. My understanding is that PG
should be rolling back failed statements
when we are not in an explicit transaction.

Do we have an incorrect setting, a misunderstanding of how it is
supposed to work, or a bug? Could anyone enlighten me?

Thanks,

Chip