Heavy inserts load wile querying...

Hello,
The Postres 9.0 database we use gets about 20K inserts per minute. As
long as you don't query at the same time the database is copying fine.
However long running queries seems to delay so much the db that the
application server buffers the incoming data as it cannot insert them
fast enough. The server has 4 HD. One is used for archive, past static
tables, the second is the index of the current live tables and the third
is the current data. The fourth is the OS.

The serve specs are:
Intel(R) Xeon(R) CPU           W3520  @ 2.67GHz
4 cores
18GB Ram

Do you think that this work load is high that requires an upgrade to
cluster or RAID 10 to cope with it?

Kind Regards
Yiannis