Talking to external device over serial with Arduino

I guess that by "two serial out ports" you mean one UART (since you also describe USB as 2 ports). Rocketmagmet indicates that many/most LED strings use SPI, but that will need at least 3 wires. Can you specify which protocol you need?

In general Microchip has the lowest cost microcontrollers, also this time. And Microchip has many microcontrollers in DIL package as well, while many others have ditched that. May be important for DIY. The PIC18F13K50

• exists in both DIL-20 and SMT packages
• works at 5 V (for interfacing with the LED strip)
• is low cost at $2.5 (OK, that's relative, but USB able controllers are a bit more expensive than more basic types)
• has Enhanced USART for UART interface
• has an SPI interface in case you meant that
• has 25 mA source and sink I/O, so you can directly drive a couple of indicator LEDs if needed

Further reading
USB Generic Function on an Embedded Device, Microchip Application Note AN1166

I think you are bitten by CR-LF (carriage return [0x0d, '\r'], line feed [0x0a, '\n']). Sometimes CR comes first followed by a LF; sometimes the LF comes first, followed by the CR; sometimes only a CR is sent; sometimes only a LF is sent.

It really depends on the application and/or operating system you use. I'd advice to change your sketch in such a way that it doesn't print the actual characters, but prints the hexcodes. That will be the easiest way to troubleshoot this problem.

Don't filter the incoming data, so remove the '\n'-check:

if (recieved == '\n')

Replace:

lcd.print(inData);

by:

char ascii[ 8 ];
sprintf( ascii , "0x%02x " , inData );
lcd.print( ascii );

to view the data in hex.

Once you figured out what codes are arriving at your Arduino, you can change your code accordingly. Make your code robust as possible, as CR/LF comes in many variations. I'd even account for a NULL (0x00) character.