If INSERTS are rare, I would avoid doing a NOT EXISTS (...) since it emits a SELECT on all updates. Instead, take a look at wildpeaks answer: https://dba.stackexchange.com/questions/5815/how-can-i-insert-if-key-not-exist-with-postgresql
CREATE OR REPLACE FUNCTION upsert_tableName(arg1 type, arg2 type) RETURNS VOID AS $$
DECLARE
BEGIN
UPDATE tableName SET col1 = value WHERE colX = arg1 and colY = arg2;
IF NOT FOUND THEN
INSERT INTO tableName values (value, arg1, arg2);
END IF;
END;
$$ LANGUAGE 'plpgsql';
This way Postgres will initially try to do a UPDATE. If no rows was affected, it will fall back to emitting an INSERT.