The state of PG replication in 2008/Q2?

My company finally has the means to install a new database server for
replication. I have Googled and found a lot of sparse information out
there regarding replication systems for PostgreSQL and a lot of it looks
very out-of-date. Can I please get some ideas from those of you that
are currently using fail-over replication systems? What advantage does
your solution have? What are the "gotchas" I need to worry about?

My desire would be to have a parallel server that could act as a hot
standby system with automatic fail over in a multi-master role. If our
primary server goes down for whatever reason, the secondary would take
over and handle the load seamlessly. I think this is really the "holy
grail" scenario and I understand how difficult it is to achieve.
Especially since we make frequent use of sequences in our databases. If
MM is too difficult, I'm willing to accept a hot-standby read-only
system that will handle queries until we can fix whatever ails the master.

We are primary an OLAP environment but there is a constant stream of
inserts into the databases. There are 47 different databases hosted on
the primary server and this number will continue to scale up to whatever
the server seems to support. The reason I mention this number is that
it seems that those systems that make heavy use of schema changes
require a lot of "fiddling". For a single database, this doesn't seem
too problematic, but any manual work involved and administrative
overhead will scale at the same rate as the database count grows and I
certainly want to minimize as much fiddling as possible.

We are using 8.3 and the total combined size for the PG data directory
is 226G. Hopefully I didn't neglect to include more relevant information.

As always, thank you for your insight.

-Dan