Problems with 8.1 initdb

I just tried to install 8.1 from the rpms provided on the
postgresql.org<http://postgresql.org>mirrors.

I had 8.0 installed, and removed all the 8.0 rpms. I then blew away my
8.0cluster (playing with a test server, obviously). When I recreated
the
directory for the cluster and tried to run initdb, initdb abended with the
following:

[postgres(at)editstapp1 ~]$ cd /usr/bin
[postgres(at)editstapp1 bin]$ ls postgres
postgres
[postgres(at)editstapp1 bin]$ ls initdb
initdb
[postgres(at)editstapp1 bin]$ /usr/bin/initdb --local=C /postgresql/50001
fgets failure: Success
The program "postgres" is needed by initdb but was not found in the
same directory as "/usr/bin/initdb".
Check your installation.
[postgres(at)editstapp1 bin]$

There were no errors on the rpm installs. All rpms except for the python rpm
were installed. Any idea what is going on here?

RHEL-AS-4
RHEL-AS-4 rpms installed from
ftp10.us.postgresql.org<http://ftp10.us.postgresql.org>mirror.

Thanks for any help.

Chris

P.S.

This is a test install for an upgrade from 7.3.4 to the latest version.
Since 8.1 is out, we would like to upgrade all the way to it. Does anyone
see any issues/problems with this strategy (assuming the initdb issue can be
resolved)?