char data1[] = "";
		int offset = 0;

		LPTSTR pszString = NULL;
		LPSTREAM lpStream = NULL;

		CreateStreamOnHGlobal(NULL, TRUE, &lpStream);
		StreamStringCopy ((LPSTREAM)lpStream, (LPCTSTR)"");
		while(of->pread(&data1,1023,offset) > 0){
			LPCTSTR tempStr = data1;
			StreamStringCat ((LPSTREAM)lpStream, tempStr);
			offset = offset + strlen(data1);	
		}
		Bitmap bm(lpStream,FALSE);
		bm.GetHBITMAP(Color.Black, &ret);
	
char* data1 = static_cast<char*> (std::malloc (1024 * sizeof (char));

...

std::free (data1);

// or try this
char data1 [1024] = { 0 }; // Gives you 1024 bytes to write to on the stack