The following bug has been logged online:

Bug reference: 1954
Logged by: Antonio Molina
Email address: molinaantonio (AT) hotmail (DOT) com
PostgreSQL version: 7.3
Operating system: Linux
Description: Bug in to_date('09-10-2005', 'dd-mm-yyyy')
Details:

We did have a error using TO_DATE() function with 09-10-2005 the result is
08-10-2005.

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Antonio Molina wrote:
Works OK in 7.4 here. Does it work for other dates, and is that a
daylight-saving-time (or summer-time) change-over date in your locale?

--
Richard Huxton
Archonet Ltd

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