I am reading the incoming data into a char array without a problem and would now like to parse the array to separate out the numeric values from the letter strings. Converting the numeric portions won't be a problem with atoi, but I am stumped as to how to dump the text strings from the char array into a proper String.
I'd recommend abandoning the idea of using the String class. There is no particular advantage in this case. Once you have collected all the data into to a NULL-terminated char array (whether or not you are actually doing this is a mystery, looking at the code you posted), you can use strtok() to get pointers to the tokens.
If you know that the first two tokens represent numbers, use atoi() to convert them the ints (or the other atoX functions for other types). Then, the non-numeric token ("qwerty" or "asdf...") can be used as is, for whatever purpose you had in mind.
Post the code you have, and a more concise description of the problem you are having, if you need more help.