File postgresql-README.SuSE.en of Package postgresql

The configuration variables for the PostgreSQL server are now stored
in the /etc/sysconfig/postgresql file. Now, you can set many commando
line parameters in /var/lib/pgsql/data/postgresql.conf.

Before updating PostgreSQL packages whose version numbers are to
increase by at least the second decimal place or higher (for example,
6.4.x to 7.0.x or 7.1.x to 7.2.x), use the pg_dumpall program to back
up your PostgreSQL databases. A typical command for doing this is:

pg_dumpall > SAVE

Backups should be performed as user "postgres". Once the backup is
completed successfully, shut down the PostgreSQL server (as root:
"rcpostgresql stop"). Further configuration files in
/var/lib/pgsql/data, including pg_hba.conf and postgresql.conf,
may need to be backed up as well.
Note: since version 8.4, "ident sameuser" needs to be replaced with 
"ident" in pg_hba.conf.

Afterwards, delete the previous database files

rm -r /var/lib/pgsql/data/*

or, if you have enough space, move it to

mv /var/lib/pgsql/data /var/lib/pgsql/data.old

so that the new database structure can be created under
/var/lib/pgsql/data when you start the new database server for the
first time (as root:"rcpostgresql start").

The saved contents of the database and the configuration files will
then have to be played back as user postgres:

psql template1 -f SAVE

If, following exhaustive testing, you are certain that everything is
still available and functioning properly after the migration, delete
the backup file and the old database files.