Looking and searching into your log file I found:
2010-05-11 18:21:44 GMT FATAL: data directory "/var/lib/postgresql/8.4/main"
has group or world access
2010-05-11 18:21:44 GMT DETAIL: Permissions should be u=rwx (0700).
Have you tried to change permissions of this directory
"/var/lib/postgresql/8.4/main" and then reinstall or upgrade your
postgresql?
** Changed in: postgresql-8.4 (Ubuntu)
Importance: Undecided => Low
** Changed in: postgresql-8.4 (Ubuntu)
Status: New => Incomplete
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package postgresql-8.4 8.4.3-0ubuntu9.10 failed to install/upgrade: subprocess
installed post-installation script returned error exit status 1
https://bugs.launchpad.net/bugs/579479
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