PL/pgSQL 'i = i + 1' Syntax

Hellow PostgreSQL hackers,

Quick question. Why does the 'i = i + 1' syntax work in this PL/pgSQL  
function?

try=# CREATE OR REPLACE FUNCTION inc_by_two(
try(#    upfrom int,
try(#    upto   int
try(# ) RETURNS SETOF INT AS $$
try$# BEGIN
try$#     FOR i IN upfrom..upto LOOP
try$#         RETURN NEXT i;
try$#         i = i + 1;
try$#     END LOOP;
try$# END;
try$# $$ LANGUAGE 'plpgsql';
CREATE FUNCTION
try=# select * from inc_by_two(1,10);
inc_by_two
------------          1          3          5          7          9
(5 rows)

Someone posted a PL/pgSQL function in my blog with this syntax, which  
is how I know about it, but I couldn't find it documented anywhere.  
Is it a special exception for loop variables, perhaps?

Thanks,

David