It’s a PATH issue. Mac OSX Lion includes Postgresql in the system now. If you do a which psql you’ll likely see usr/bin/psql instead of usr/local/bin/psql which is HomeBrew’s correct one. If you run brew doctor you should get a message stating that you need to add usr/local/bin to the head of your PATH env variable.
Editing your .bash_profile or .profile, or whichever shell you’re using and adding:
export PATH=/usr/local/bin:$PATH
as the first export for the PATH then either quit you shell session or source your file with source ~/.bash_profile and it should now be OK again.