GoForSmoke:
PeterH:
cjdelphi:
with each iteration of the loop does a local variable get created (c/n) and recreated over and over again?Yes. Automatic local variables are allocated on the stack and thrown away when the stack is unwound at the end of the call. In general, the more tightly you restrict the scope of the data the less chance there is for dependencies and unintended interactions between different parts of your code. This is why use of global data is best avoided where possible, and use of local data and arguments is generally preferred.
With 2k RAM I prefer globals and keeping control of my code. A few locals don't hurt but whole buffers in short often-called functions, it's good to be aware of because some day you might be writing code that needs to be fast rather than 'do it this way every time'.
awareness != mandatory practice
I've likened using C++ Strings on Arduino because C++ Strings are okay on a PC to putting a bathtub on a bicycle just because your house has one. I still feel the same. There's a lot of coding practices I've happily done on PC's that I wouldn't think of doing on Arduino.
I too like the use of global variables in my arduino projects. I like that I can define them all at the top of the sketch with comments on what they represent. I kind of limit my use of local variables to things like the for statements and such. I know this is against the concept of good variable scoping practice that C/C++ encourages programmers to use and does make sense for larger projects where teams of programmers are working on the same application program and have to not step on each others coding functions, but with the limited SRAM space and me being the only one writing the code, global variables work better for me and I haven't heard of a good reason I should avoid them in my Arduino sketches. Sometime I just have to be an outlaw in heart I guess. 
Lefty