7.1 vacuum

How does 7.1 work now with the vacuum and all?

Does it go for indexes by default, even when i haven't run a vacuum at all?
Does vacuum lock up postgres? It says the analyze part shouldn't, but how's
that for all of the vacuum?

An 7.0.3 db we have here we are forced to run vacuum every hour to get an
acceptable speed, and while doing that vacuum (5-10 minutes) it totaly
blocks our application that's mucking with the db.

Just curious

Magnus Naeslund