Problem with database sizes

Hi

I have a BIG problem with a database.

The database is only around 500 records. It gets updated, every record,
once an hour. When I started up the database about 2 weeks ago, it was all
good, and did all the updates in about 3 minutes (it is purely a series of
updates, nothing complex).

I noticed recently that the updates were taking longer. In fact they are now
taking over half an hour. This is crazy on a 300MHz machine with 160 MB of
memory.

I checked the database, and the file containing these 400 records is *HUGE*
It is around 50 Megs in size.
When I run select * into recordbak from record; from psql, it creates a new
file in the database directory, and this file is around 200K, less than 0.5%
of the size!!!

I am running postgresql 6.3.2 (I know it is slightly old, but when I updated
to a newer version, but it started to spawn dozens of copies, and took the
load of my server up to over 100, so I reverted back to what was working.
Sorry I cant provide much more of a bug report there but I run a business
application and I cant afford to have it killing my machine to get a
bug report)

But I need to know WHY it has increased its size by over 200 times the
size of the database...

My machine is again being hammered, to do this simple set of updates
takes it 34 minutes in every hour taking up 90% CPU on a decent sized
server!

Any suggestions? Or is this a known problem? And is there any fix?

Thanks

                    M Simms