plpgsql function question

Hi

I am learning plpgsql and am getting errors on this simple function:

CREATE OR REPLACE FUNCTION test2(tab1 text, tab2 text )
  RETURNS text AS
  $$
  BEGIN
  EXECUTE 'create table ' || quote_ident(tab2) || ' as Select *  from ' || quote_ident(tab1);
    RETURN 'done';
  END; $$
  LANGUAGE 'plpgsql' VOLATILE;

Yet, when I replace tab1 & tab2 in the execute statement it works just fine:

CREATE OR REPLACE FUNCTION test2(tab1 text, tab2 text )
  RETURNS text AS
  $$
  BEGIN
  EXECUTE 'create table ' || quote_ident($2) || ' as Select *  from ' || quote_ident($1);
    RETURN 'done';
  END; $$
  LANGUAGE 'plpgsql' VOLATILE;

Any insight would be appreciated!

Thanks

Scott