duplicates

Hello dear list!
Here is the problem i have:
i am using 7.3.4 postgres .i have an aplication that updating 2 tables.
while it needs to update something - it does not select the rows that
are already in the table search what it needs to update and execute
an 'update' query .in place it deletes all the old rows and inserts the
new one.However while we have a havy load we got a duplicate rows in the
table ,althought we use transaction an both delete and the new insert
are in the same transaction.We are pretty sure there is no bug in
the applicatioin that inserts the data more then once .
Is that a known problem ?What could be the problem?

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Evgeny.