Further analysis:
It is not an issue with the postgresl locale.
When running with  hg current tip 4786:6018617c55ab
   LOGGING_LEVEL=DEBUG python run_tests.py .  testFilteringStringCase

I can see that there is always "LIKE" returned from the call.
I've added a call to show me what gets called see
--- a/roundup/backends/rdbms_common.py  Sun May 05 00:21:27 2013 +0200
+++ b/roundup/backends/rdbms_common.py  Tue May 07 23:57:58 2013 +0200
@@ -2439,8 +2439,10 @@
                     v = ['%%'+self.db.sql_stringquote(s)+'%%' for s in v]
 
                     # now add to the where clause
+                    like = self.insensitive_like()
+                    print repr(self),repr(self.insensitive_like),self.insensitive_like()

And the result is always:
testFilteringStringCase (test.test_postgresql.postgresqlDBTest) ... 
<hyperdb.Class "issue"> <bound method IssueClass.insensitive_like of 
<hyperdb.Class "issue">> LIKE