How do I install PostgreSQL in Debian/Ubuntu?
If you haven't set up the environment variables, then you need to specify the full path to your executables.

What version of Postgresql are you using? You show a link to 8.3 which is many years old. These docs are current: http://www.postgresql.org/docs/current/static/creating-cluster.html

Did you install Postgresql with an up-to-date package, a la http://www.postgresql.org/download/linux/ubuntu/ ?

When installing 9.2 on Ubuntu, I added the following lines to the ~postgres/.bash_profile

export PATH=/usr/lib/postgresql/9.2/bin:$PATH:/usr/sbin
export PGDATA=/var/lib/postgresql/9.2/main
export PGPORT=5432


Where "/usr/lib/postgresql/9.2/bin" is the path to your 9.2 executables. That made the installation a bit smoother for me.