Case insensitivity, and option?

I was at a client office reviewing some code. They use MSSQL and I 
noticed that:

select * from table where field = 'blah';
gave the same results as:
select * from table where field = 'BLah';

I was shocked. (a) because I know a lot of my code could be easier to 
write, and (b) that their code would break on every other database I am 
aware of. Does anyone know about this?

Is it practical/desirable for PostgreSQL to have this as a configuration 
setting?