upgrade from 7.4 to 8.3

Hi,

I've just upgrade postgresql from 7.4 to 8.3 on a machine running debian.

And i ran in trouble.  I've searched the internet but didn't find an
answer to my solution.
Is it possible to upgrade from 7.4 to 8.3 at once?

I upgraded as follows:
when 7.4 was installed i dumped the data with:
    su postgres -c "pg_dumpall --create" > out
when 8.3 was installed i imported the data with:
    su postgres -c "psql < out"

Databases in 7.4 were encoded as utf-8.  Now when importing postgresql
gives the following error:

ERROR:  encoding UTF8 does not match server's locale en_US
DETAIL:  The server's LC_CTYPE setting requires encoding LATIN1.

When creating a database from pgadmin (logged in as postgres) with:
CREATE DATABASE "db" WITH OWNER = postgres TEMPLATE = template0 ENCODING
= 'UNICODE'

postgres replies with:
ERROR:  encoding UTF8 does not match server's locale en_US
DETAIL:  The server's LC_CTYPE setting requires encoding LATIN1.
********** Error **********
ERROR: encoding UTF8 does not match server's locale en_US
SQL state: XX000
Detail: The server's LC_CTYPE setting requires encoding LATIN1.

Can anybody tell me what's wrong?

--
Best regards,

Marc