Presently you get a million lines of '\N command not recognised' and various other random things because if a line of the copy fails due to say a FK constraint, or even if the COPY is run in an aborted transaction, it tries to execute all the stdin data as actual statements. It's really, really, really annoying.
Also, sometimes when you copy and paste SQL into a psql window, it executes help on commands for each line, although it doesn't affect the paste. That is also really annoying. I'll add to this email when it happens to me again, cos I tried a few pastes and couldn't reproduce it :/
Chris
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