Ubuntu Security :: Iptable REDIRECT From Local Machine?

I have a server that is on a high port number, and people want it on port 80. For root exploit issues people say the server can not run as root. So to solve things I want to redirect port 80 to a high port number, say 12345 on the machine. This has been discussed all over the web, so I find I need to do this:

/sbin/iptables -t nat -A PREROUTING -p tcp -d 123.45.67.89 --dport 80 -j REDIRECT --to-ports 12345
/sbin/iptables-save > /etc/sysconfig/iptables

And I do this, an voila things work for the whole world. All machines in the world can see the server on port 80 on the machine.Except, on the machine itself. On the machine 123.45.67.89, I try to get to the server on 123.45.67.89:80, I get a can't connect error. On the machine if I try 123.45.67.89:12345 I can connect.What am I doing wrong here? I don't want localhost network really, I want the ip address and port, but I want the forwarding to work on the local machine. But it doesn't...