lower/upper functions and strings in searches

I am obviuously doing some newbie trick, and I ordinarily would spend time browing the archives, but the
archives.postgresql.orgsite seems to be absurdly slow. 

This is 7.3.3 on a linux box.

I have a bunch of data with state, city, county and country names. When our application does a search for an exact
match:

select * from gx_geotowns where l_state = 'NM'; I get back a lot of rows of cities in New Mexico, as expected.

If I try:

select * from gx_geotowns where upper(l_state) = upper('nm');

I get back:
---------+-----------+----------+------------+------+------
(0 rows)

I've used other databases in which a similar statement worked as exepected:
select * from clientswhere upper(client_name) = upper("Some client or otheR");

And it finds the row(s) in question ...

I just know I'm overlooking some real obvious thing but for some reason this eludes me. I could see if the search was
veryslow (the function returns type "text" and the indexed columns are of type CHAR(). 

If someone could offer help I would appreciate it,

Thanks,

Greg Williamson
DBA GlobeXplorer LLC