BUG #3258: Password fails, RPM installs in wrong directory

The following bug has been logged online:

Bug reference:      3258
Logged by:          Phil Criley
Email address:      pfcriley@pcwright.com
PostgreSQL version: 8.1 and 8.2
Operating system:   Fedora Core 5
Description:        Password fails, RPM installs in wrong directory
Details:

We run FC5 on a server. PostgreSQL does not accept passwords when set to
md5, I deleted version 8.1 and installed the latest, 8.2 from source. That's
when I discovered that the install script in Fedora's RPM put postgreSQL in
the /var/lib/pgsql but the default installation from the source puts it in
/usr/local/pgsql. PostgreSQL apparently is hard coded to look in
/usr/local/pgsql for its data. I cannot figure out how to add it as a
service without using the RPM.

Without the security of md5 we cannot use postgreSQL to run ledgerSMB, etc.
I would rather not have to use Firebird but that's what we'll have to do if
we can't find a way to get postgreSQL working.