Why are the packages found with apt-get always horribly out of date?

Whenever I use the package manager, it can only ever find really old versions of stuff. Example:

sudo apt-get update
sudo apt-get install postgresql

The best it can do is version 8.4 (3 years out of date). Trying to get a later version, I get:

$ sudo apt-get install postgresql-9.1
Reading package lists... Done
Building dependency tree
Reading state information... Done
E: Couldn't find package postgresql-9.1

I experience the same issue whenever I use the package manager, so I usually just download and build things from source.

How can I make it find up-to-date software?