Slow Postgresql server

Hello all,

My website has been having issues with our new Linux/PostgreSQL  
server being somewhat slow. I have done tests using Apache Benchmark  
and for pages that do not connect to Postgres, the speeds are much  
faster (334 requests/second v. 1-2 requests/second), so it seems that  
Postgres is what's causing the problem and not Apache. I did some  
reserach, and it seems that the bottleneck is in fact the hard  
drives! Here's an excerpt from vmstat:

procs -----------memory---------- ---swap-- -----io---- --system--  
-----cpu------
r  b   swpd   free   buff  cache   si   so    bi    bo   in    cs us  
sy id wa st
1  1    140  24780 166636 575144    0    0     0  3900 1462  3299  1   
4 49 48  0
0  1    140  24780 166636 575144    0    0     0  3828 1455  3391  0   
4 48 48  0
1  1    140  24780 166636 575144    0    0     0  2440  960  2033  0   
3 48 48  0
0  1    140  24780 166636 575144    0    0     0  2552 1001  2131  0   
2 50 49  0
0  1    140  24780 166636 575144    0    0     0  3188 1233  2755  0   
3 49 48  0
0  1    140  24780 166636 575144    0    0     0  2048  868  1812  0   
2 49 49  0
0  1    140  24780 166636 575144    0    0     0  2720 1094  2386  0   
3 49 49  0

As you can see, almost 50% of the CPU is waiting on I/O. This doesn't  
seem like it should be happening, however, since we are using a RAID  
1 setup (160+160). We have 1GB ram, and have upped shared_buffers to  
13000 and work_mem to 8096. What would cause the computer to only use  
such a small percentage of the CPU, with more than half of it waiting  
on I/O requests?

Thanks a lot
Jason