If all of the data coming from $filehandle is plain text, why not use Perl's normal buffered file ops? 
my $line = <$filehandle>;
chomp $line;

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Update: If, OTOH, you can't use the buffered ops, then I do think reading one character at a time is your best bet. But you can do better than appending the character with .= each time: 
my $line;
open my $linefh, \$line;
until ($char eq "\n")
{
  sysread($filehandle, $char, 1);
  print $linefh $char;
}
close $linefh;

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The above requires Perl 5.8 I think. If you don't have that you can use IO::Scalar.

Update 2: I noticed that there's a Net::IRC module already out there. Might this work better for you than playing with sockets directly?

In reply to Re: unbuffered read from socket by Errto
in thread unbuffered read from socket by Forsaken

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