Postfix and aliases

Kubuntu 6.10 AMD64

I have the following in /etc/aliases

testalias: valid.address@xxxxxxxxxxx

If I issue the command:
<nail -s "subject" -r valid.address@xxxxxxxxxxx testalias>
and then send the mail it bounces on recipient testalias@xxxxxxxxxxx

The following works:
<nail -s "subject" valid.address@xxxxxxxxxxx>

I've run "sudo newaliases"

sudo postconf -d | grep aliases
alias_database = hash:/etc/aliases
alias_maps = hash:/etc/aliases, nis:mail.aliases
newaliases_path = /usr/bin/newaliases

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