Problem with locking up when running multiple processes from Perl

I've experienced this with both Postgres 7.4.3 and 7.4.5, using Perl
modules DBD::Pg 1.40 and DBI 1.48.

To boil it down to the simplest case:

I can run a few instances of the following program in parallel, but if I
try to run 12 in parallel the database system will lock up, so that I
can't run a psql either.

In our production system we get similar behavior.

Program follows:

**********************************

use strict;
use subs;
use integer;
use XML::Simple;
use Data::Dumper;
use Exporter;
use Proc::ProcessTable;
use POSIX;

my $db = "dbi:Pg:dbname=issp";
my $dbh = DBI->connect($db, "postgres", "p0stgr3s");

sub do_query($;$) {
    my $query = shift;
    my $dbh = shift;
    my $own_dbh = 0;
    if (! $dbh) {
        my $db = "dbi:Pg:dbname=testdb";
        $dbh = DBI->connect($db, "", "");
        $own_dbh = 1;
    }
    if ($dbh) {
        my $res = $dbh->do($query);
        $dbh->disconnect() if $own_dbh;
        defined($res) or die "DATABASE: " . $DBI::errstr . " " . $query;
        return $res;

    } else {
        die "DATABASE: " . $DBI::errstr;
    }
}

foreach (1..500) {
        print STDERR "$_ ";
        my $item = sprintf("l%05d", $_);
        my $res = do_query("UPDATE config_vals SET config_val='$item'
WHERE ".
                "config_key='ID_CODE'", $dbh);
}

$dbh->disconnect();