slow update on 1M rows (worse with indexes)

Hello,

I experience significant performance issues with postgresql and updates.
I have a table which contains ~1M rows.
Layout:
TOTO=# \d versions_9d;
             Table «public.versions_9d»
  Colonne   |          Type          | Modificateurs
------------+------------------------+---------------
 hash       | character(32)          |
 date       | integer                | default 0
 diff       | integer                | default 0
 flag       | integer                | default 0
 size       | bigint                 | default 0
 zip_size   | bigint                 | default 0
 jds        | integer                | default 0
 scanned    | integer                | default 0
 dead       | integer                | default 0

Test case:
Create a new DB and load a dump of the above database with 976009 rows,
then i perform updates on the whole table.  I recorded the time taken
for each full update and the amount of extra disk space used.  Each
consecutive update of the table is slower than the previous
beebox@evobrik01:~$ time psql TOTO -c "UPDATE versions_9d SET flag=2"
UPDATE 976009
real    0m41.542s
beebox@evobrik01:~$ time psql TOTO -c "UPDATE versions_9d SET flag=3"
UPDATE 976009
real    0m45.140s (+480M)
beebox@evobrik01:~$ time psql TOTO -c "UPDATE versions_9d SET flag=4"
UPDATE 976009
real    1m10.554s (+240M)
beebox@evobrik01:~$ time psql TOTO -c "UPDATE versions_9d SET flag=5"
UPDATE 976009
real    1m24.065s (+127M)
beebox@evobrik01:~$ time psql TOTO -c "UPDATE versions_9d SET flag=6"
UPDATE 976009
real    1m17.758s (+288M)
beebox@evobrik01:~$ time psql TOTO -c "UPDATE versions_9d SET flag=7"
UPDATE 976009
real    1m26.777s (+288M)
beebox@evobrik01:~$ time psql TOTO -c "UPDATE versions_9d SET flag=8"
UPDATE 976009
real    1m39.151s (+289M)

Then i tried adding an index to the table on the column date (int) that
stores unix timestamps.
TOTO=# CREATE INDEX versions_index ON versions_9d (date);
(-60M) disk space goes down on index creation
beebox@evobrik01:~$ time psql TOTO -c "UPDATE versions_9d SET flag=9"
UPDATE 976009
real    3m8.219s (+328M)
beebox@evobrik01:~$ time psql TOTO -c "UPDATE versions_9d SET flag=8"
UPDATE 976009
real    6m24.716s (+326M)
beebox@evobrik01:~$ time psql TOTO -c "UPDATE versions_9d SET flag=10"
UPDATE 976009
real    8m25.274s (+321M)

As a sanity check, i loaded mysql5 and tried the same database and
updates.  With mysql, the update always lasts ~8s.
The conclusions I have come to is that update==insert+delete which seems
very heavy when index are present (and heavy disk wise on big tables).
Is there a switch i can flip to optimise this?

Thanks in advance,
Gabriel Biberian