Is using malloc() and free() a really bad idea on Arduino?
My general rule for embedded systems is to only malloc() large buffers and only once, at the start of the program, e.g., in setup(). The trouble comes when you allocate and de-allocate memory. Over a long run session, memory becomes fragmented and eventually an allocation fails due to lack of a sufficiently large free area, even though the total free memory is more than adequate for the request. 

(Historical perspective, skip if not interested): Depending on the loader implementation, the only advantage of run-time allocation vs. compile-time allocation (intialized globals) is the size of the hex file. When embedded systems were built with off the shelf computers having all volatile memory, the program was often uploaded to the embedded system from a network or an instrumentation computer and the upload time was sometimes an issue. Leaving out buffers full of zeros from the image could shorten the time considerably.)

If I need dynamic memory allocation in an embedded system, I generally malloc(), or preferably, statically allocate, a large pool and divide it into fixed-size buffers (or one pool each of small and large buffers, respectively) and do my own allocation/de-allocation from that pool. Then every request for any amount of memory up to the fixed buffer size is honored with one of those buffers. The calling function doesn't need to know whether it's larger than requested, and by avoiding splitting and re-combining blocks we solve fragmentation. Of course memory leaks can still occur if the program has allocate/de-allocate bugs.