This should be faster, as in DoReadTCP, and it simplifies the code a little.
Also, check for returned data size of 0 in DoReadTCP. I don't think this should happen, but in case it did, the returned handle could be invalid.
DoReadTCP automatically disposes the old read buffer handle before doing the read, and then locks the new read buffer handle before returning. This removes the need for most explicit locking/unlocking of the handle. A macro is provided to dispose of the handle earlier (useful in a few cases where it may be big, and another read isn't immediately performed).
Also, set displayInProgress to FALSE in NextRect, rather than in code for each encoding.
This should be faster than the other options (reusing an existing handle or using a pointer) because it avoids an extra copy of the data inside Marinetti. For the other options, Marinetti will create a new handle and copy the data to it anyway, but then copy it again into the requested destination.
The logic for making sure the color table was complete before connecting was slightly broken due to wraparound, so it would cause all entries to be generated, re-generating any that already had been. This fixes it, which should make the initial connection process slightly faster on slow systems.
The buffer from the last read is still left around until the next one, but this should usually be fairly small, and it's the same behavior as the main DoReadTCP routine.
