Unexpected behaviour of numeric datatype when mixed with,float4, domains and plpgsql variables

I found an odd behaviour, which I believe it is a bug, and for us it is
a serious matter. Can anyone on a platform or version other than
PostgreSQL 8.0.1 on Windows XP Advanced Server check if you can
reproduce the finding on your server?

Tables with columns specified as numeric using a domain type seem to be
capable of containing values with a higher precision than specified,
when mixing in operations with float4 (which we use to store percentages).

The following snippet can be used to reproduce the error (run each step
sequencially and observe results):

--step 1: direct execution on base type
SELECT 92::numeric(15,4) * 0.2::float4;

--step 2: using a function variable and a domain
CREATE DOMAIN currency AS numeric(15,4);
CREATE TABLE test (id serial, amt currency);
CREATE FUNCTION f_test(currency) RETURNS currency AS $$
DECLARE n currency;
BEGIN n := $1 * 0.2::float4;
INSERT INTO test (amt) VALUES (n); RETURN n;
END $$ LANGUAGE PLPGSQL;
SELECT f_test(92);

--step 3: wrong precision stored in the table!
SELECT id, amt, amt::currency as amt_still_bad,
amt::numeric(15,4) as amt_casted_as_base,
amt::float::currency as amt_casted_back_n_forth
FROM test;

Thanks folks.

Ezequiel Tolnay
Good Business Technology
Sydney, NSW, Australia