Permission denied to create database

Sleep deprived and surely doing something stupid here; I can't seem to
confer the ability to create databases on a regular user. I always get
"permission denied to create database". One note: template1 has had
some C functions added to it. Could that be related to the problem?

$ createdb -U joe joejunkdb
createdb: database creation failed: ERROR: permission denied to create
database

$ sudo -u postgres psql -c "grant all on tablespace pg_default to joe"
Password:
GRANT

$ createdb -U joe joejunkdb
createdb: database creation failed: ERROR: permission denied to create
database

joe=> \db+
List of tablespaces
Name | Owner | Location | Access
privileges | Description
------------+----------+----------+----------------------------------------+-------------
pg_default | postgres | | {postgres=C/postgres,joe=C/postgres} |
pg_global | postgres |
| |

joe=> \l+
List of databases
Name | Owner | Encoding | Tablespace | Description
-----------+----------+----------+------------+---------------------------
...
template1 | postgres | UTF8 | pg_default | Default template database

For some reason, I haven't succeeded by reading the docs and googling.

Thanks for jarring my memory,
Kevin Murphy
PostgreSQL 8.2.4