Releasing disk space by using DELETE or TRUNCATE?
From the docs on VACUUM


  There are two variants of VACUUM: standard VACUUM and VACUUM FULL. VACUUM FULL can reclaim more disk space but runs much more slowly. Also, the standard form of VACUUM can run in parallel with production database operations. (Commands such as SELECT, INSERT, UPDATE, and DELETE will continue to function normally, though you will not be able to modify the definition of a table with commands such as ALTER TABLE while it is being vacuumed.) VACUUM FULL requires exclusive lock on the table it is working on, and therefore cannot be done in parallel with other use of the table. Generally, therefore, administrators should strive to use standard VACUUM and avoid VACUUM FULL.


You essentially need to issue a command to rewrite the whole table (from the same doc),


  Tip: Plain VACUUM may not be satisfactory when a table contains large numbers of dead row versions as a result of massive update or delete activity. If you have such a table and you need to reclaim the excess disk space it occupies, you will need to use VACUUM FULL, or alternatively CLUSTER or one of the table-rewriting variants of ALTER TABLE. These commands rewrite an entire new copy of the table and build new indexes for it. All these options require exclusive lock. Note that they also temporarily use extra disk space approximately equal to the size of the table, since the old copies of the table and indexes can't be released until the new ones are complete.


In the same document,


  Tip: If you have a table whose entire contents are deleted on a periodic basis, consider doing it with TRUNCATE rather than using DELETE followed by VACUUM. TRUNCATE removes the entire content of the table immediately, without requiring a subsequent VACUUM or VACUUM FULL to reclaim the now-unused disk space. The disadvantage is that strict MVCC semantics are violated.


And, from the docs on TRUNCATE


  TRUNCATE quickly removes all rows from a set of tables. It has the same effect as an unqualified DELETE on each table, but since it does not actually scan the tables it is faster. Furthermore, it reclaims disk space immediately, rather than requiring a subsequent VACUUM operation. This is most useful on large tables.