Look on my works, ye Mighty, and despair!

While it is possible to use node-pg with just raw callbacks, as soon as you want to use transactions the chances of getting it right dwindle rapidly.

Using a promise library helps remove some of the pain. I ended up with something like this (using Q):

var Q = require('q'),
    pg = require('pg'),
    Connection = require('./Connection');

module.exports = function(connString) {
    this.connect = function() {
        var deferred = Q.defer();

        pg.connect(connString, function(err, client, done) {
            if (err) {
                return deferred.reject(new Error(err));
            }

            deferred.resolve(new Connection(client, done));
        });

        return deferred.promise;
    };
};

var Q = require('q'),
    pg = require('pg');

module.exports = function(client, done) {
    this.begin = function() {
        return this.query('BEGIN;', []);
    };

    this.query = function(sql, args) {
        var deferred = Q.defer();

        client.query(sql, args, function(err, result) {
            if (err) {
                err.message = err.message + ' (Query: ' + sql + ', Args: ' + args + ')';
                return deferred.reject(err);
            }

            deferred.resolve(result.rows);
        });

        return deferred.promise;
    };

    this.rollback = function() {
        var deferred = Q.defer();

        client.query('ROLLBACK', function(err) {
            deferred.resolve();
            return done(err);
        });

        return deferred.promise;
    };

    this.commit = function() {
        var deferred = Q.defer();

        client.query('COMMIT', function(err) {
            if (err) {
                deferred.reject(err);
            } else {
                deferred.resolve();
            }
            return done(err);
        });

        return deferred.promise;
    };

    this.close = function() {
        done();
    };
}

Which you can use like this:

var db = new Db(connString);

return db.connect().then(function(conn) {
    return db.begin().then(function() {
        return conn.query('SELECT something FROM foo WHERE id = $1;', [id]).then(function(rows) {
            return conn.query('INSERT INTO ...', [...]);
        }).then(function() {
            return conn.commit();
        });
    }).fin(conn.close);
});

And remove at least some of the risk of failing to return the connection to the pool, or otherwise bungling your error handling.