The readBytesUntil function currently drops any data in the buffer after the "interesting" character.  So if, for example, two lines are read into the buffer before readStringUntil('\n') gets called, the first line is returned and the second vanishes.

Here's a patch (is this the right place for this sort of thing, btw?):

Index: serial/Serial.java
===================================================================
RCS file: /cvsroot/processing/processing/serial/Serial.java,v
retrieving revision 1.2
diff -r1.2 Serial.java
408,409c408,412
<       bufferIndex = 0;  // rewind
<       bufferLast = 0;
---
>       bufferIndex += length;
>       if (bufferIndex == bufferLast) {
>         bufferIndex = 0;  // rewind
>         bufferLast = 0;
>       }

now tracking this bug at:
http://dev.processing.org/bugs/show_bug.cgi?id=96
closing thread.