PostgreSQL 6.5.3 ignores date formatting settings ?

Hi folks,

I'm using PostgreSQL on RH 6.1 aswell NT. In both I got strange behaviours with data formatting and locale settings.
Check this psql dump:

##########################################################
howe=> select version();
version
-------------------------------------------------------------------
PostgreSQL 6.5.3 on i586-pc-linux-gnu, compiled by gcc egcs-2.91.66
(1 row)
howe=> select now();
now
----------------------
1999-12-28 03:16:06-02
(1 row)

howe=> set datestyle to 'European';
SET VARIABLE
howe=> show datestyle;
NOTICE: DateStyle is Postgres with European conventions
SHOW VARIABLE
howe=> select now();
now
----------------------
1999-12-28 03:16:44-02
(1 row)

##########################################################

Shouldn't it have changed it's date style in the second "select now()" ?
The locale settings also seem to be completely ignored.

Best Regards,
Howe.