Transactions and "create or replace function"

I have a long query something like

select slow_function(col) from large_table;

and half way through the query, in a separate connection, I

CREATE OR REPLACE slow_function ....

I was surprised to see that some of the rows in my select
were processed by the old definition and some by the new.

I would have expected that since the CREATE OR REPLACE was
in a separate connection, and hense a separate transaction,
that all the results of the select() will have been processed
by the same function.

If it matters, it's postgresql 8.0.2; the function was
actually a 3-step pl/perl function, where each step uses
spi_exec_query() to call the other steps. Right now my
test case is large and ugly; but if this is unexpected
behavior I'm happy to make a smaller one that I can post here.

Ron