There is an error in your example for the prepare statement on page 
http://developer.postgresql.org/docs/postgres/sql-prepare.html.

Using the example from the link above

rainstorm=> PREPARE fooplan (int, text, bool, numeric(8,2)) AS
rainstorm->     INSERT INTO foo VALUES($1, '$2', '$3', '$4');
ERROR:  invalid input syntax for type boolean: "$3"

Taking out the single quotes around the boolean parameter 3 yields

rainstorm=> PREPARE fooplan (int, text, bool, numeric(8,2)) AS
rainstorm->     INSERT INTO foo VALUES($1, '$2', $3, '$4');
ERROR:  invalid input syntax for type real: "$4"

So take out the single quotes around the numeric parameter 4 yields

rainstorm=> PREPARE fooplan (int, text, bool, numeric(8,2)) AS
rainstorm->     INSERT INTO foo VALUES($1, '$2', $3, $4);
PREPARE
rainstorm=> EXECUTE fooplan(1, 'Hunter Valley', 't', '200.00');
INSERT 0 1

So that "works", but what it does is

rainstorm=> select * from foo;
 key | address | valid | cost
-----+---------+-------+------
   1 | $2      | t     |  200
(1 row)

It inserts the literal string of parameter two rather than the value provided for 
parameter 2.  This is in the PostgreSQL 8 beta 4 Windows native version.

Bruce Wood                      Reception (301) 373-2360  
Northrop Grumman PRB Systems    Voice Mail (301) 373-2388 ext 2151
43865 Airport View Drive                Fax           (301) 373-2398
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