Oder by not working

I was hoping that the a newer version of postgres ( 8.1.11 ) would solve
the problem we see when we use order by to get a listing of names.  Let
me explain the problem.

Suppose we have the following 3 names in a table:

 Ta, A
 Ta, Z
 Tab, A

I would expect them to show up in the oder shown above when odering by
by name, but instead I get:

 Ta, A
 Tab, A
 Ta, Z

Which as you can see is not really the desired behavior. I created a
test table and loaded these values into a field of type text, and then
issued the following query:

 select * from test order by 1;
   name=20=20=20=20
--------
 Ta, A
 Tab, A
 Ta, Z
(3 rows)

I believe I asked about this when I was on version 7.3.15, and was told
this bug would get fixed in a later version.  Is there some config
parameter I'm not aware of that solves this problem.

Thank you!
Jose