When pg_connect is opens a connections that is then closed and pg_connect
is called again to open a connection again important environment variables
like PG_DATESTYLE are cleared and the last connection is set as if that
variable was not set. Try this script to replicate the problem. It doesn't
happen at least in PHP 3.0.14.

<?

Function Connect(&$error)
{
 if(!function_exists("pg_connect"))
 {
  $error="PostgreSQL support is not available in this PHP configuration";
  return(0);
 }
 Putenv("PGUSER=root");
 Putenv("PGPASSWORD=");
 Putenv("PGDATESTYLE=ISO");
 $connection=pg_connect("","","template1");
 echo "$connection \"".getenv("PGDATESTYLE"),"\" \"".getenv("PGUSER"),"\"\n";
 if(($connection)>0)
  return($connection);
 $error=(IsSet($php_errormsg) ? $php_errormsg : "Could not connect to PostgreSQL server");
 return(0);
}

 $error="";
 if(($connection=Connect(&$error)))
 {
  pg_Close($connection);
  if($connection=Connect(&$error))
   pg_Close($connection);
 }
 if(strcmp($error,""))
  echo "Error: $error\n";
?>