postgresql performace degrading after a while

Hi All,

I seem to have a problem with postgresql 7.4.2 running on Red Hat
Enterprise Linux ES3. I am running an application server over a database
in which tables contains at most a few thousands of records. The
problematic table, however, contains 67 records, with an application
daemon updating all those records every 30 seconds.

Everything looks fine as the application goes up, however as it keeps
running, after 1-1.5 days the postgresql connections start consuming
100% of the machine's CPU in kernel mode. When I come to this point,
restart of postgresql, the application and even the entire machine does
not help, as it continues to consume 100% of the CPU immediately after
going up. Nevertheless, I have negated hardware issues/ application bug
as I discovered that when creating a dump of all application data using
the pg_dump utility, then recreating the database using dropdb and
createdb and finally restoring from the dump, I manage to return to the
start point, i.e. everything works fine and I gain more 1-1.5 days of
work.

Can anyone have an idea of what I should do to avoid recreating the DB
every day?

Thanks in Advance.