The output looks like below - I guess I need to somehow group these bytes into 10 and convert to ASSCI?
As AWOL said, you are probably seeing the ASCII values of the characters the program is receiving in your output. Each character is represented internally as a decimal number. See this chart for the numeric codes of each letter.
But, to force Serial.println () to output the letter instead of the ASCII code for the character, you can just say:
Serial.println(data, BYTE);
And if you use Serial.print () instead of Serial.println (), they will all appear on the same output line. Of course, at some point, you have to issue a Serial.println () call, otherwise the output will go way off the right side of the window.
And, as MikMo said, instead of putting an arbitrary delay in your program to try to wait for new characters to come along, you should check to see when one is ready to be read. Use Serial.available () for that.
There are examples of all of this on the Arduino site. Try here.