How to get PL languages to work in Postgres

I'm sure this is a dumb question, but...

When I try to create a PL/pgSQL function, even a very simple one like
the add_one function in the example, I get this error:

ERROR: Unrecognized language specified in a CREATE FUNCTION: 'plpgsql'. Recognized languages are sql, C, internal and the created procedural languages.

Do you have any idea how to get it to work? I just compiled and
installed Postgres in the normal way. I can see that there is a
plpgsql.so in /usr/local/pgsql/lib.

Have I missed an installation option? Anything else I should do?

Thanks,

e