Recently, I upgraded from Postgres 6.5.3 (stable Debian) to Postgres 7.0 (unstable). During the installation, it didn't ask me anything, besides overwriting the config files. Instead it gladly removed all my databases which were in /var/lib/postgres/data/base/.
Luckily, I had made a dump myself, prior to the upgrade, so there was no problem getting them back, but it would've been a good idea to have it dump and restore the databases itself. I can remember an older upgrade of postgres (6.0 -> 6.5 perhaps?) doing just this, so I wonder why this didn't. Tomas