initdb & multibyte

When running initdb:

postgres@interno:/ > /usr/local/pgsql/bin/initdb
                                   -D /home/data -L /usr/local/pgsql/lib
-E UNICODE

We get the error:

initdb: pg_encoding failed

Perhaps you did not configure PostgreSQL for multibyte support or
the program was not successfully installed.

We are using Linux kernel 2.2.16 (suse 7)
Newly compiled & installed PostgreSQL 7.02 with multibyte support.

Are their some special libraries we need for multibyte?

muchas gracias, Alan