UNIQUE not honoured for NULL

PostgreSQL version:  7.4.3 (RPMs from ftp.au.postgresql.org)

Operating Sysem: Fedora Core 1

CREATE TABLE t(i integer UNIQUE);
INSERT INTO t VALUES (null);
INSERT INTO t VALUES (null);
SELECT coalesce(i,-999) FROM t;
 coalesce
----------
     -999
     -999
(2 rows)