We're getting similar problem.
We're currently working on TPC-H benchmarking using postgresql 7.2b3.
From one up to 8 paralell conexions (we've got 8 MIPS processors), uptime
increases from 1 to 8,
but increasing above 8 makes performance drop rapidly to uptimes even lower
than 2 for 22 conexions.
As we've could trail, when we have more processes than processors, we're
getting an increasing number of collisions.
when collision happens both processes get idle for a while, then collision may
happen again and so...
Regards
Luis Amigo
Universidad de Cantabria