Does an Arduino serial port expect 8-n-1 or 7-e-1?
The Arduino by default does 8-n-1 Serial communication, I'm pretty sure. There has been talk in the developers mailing list of extending the Serial API with optional parameters to change the default settings, but that's not in the current API to my knowledge. 

I would try juicing up your Serial baud rate to 115200 (and remember to set your terminal program to use the same baud rate). There's an outside chance you are blocking the Software Serial by echoing at the same rate as you are receiving. 

Another way to rule this theory out would be to read the ASCII data from the Soft Serial reads into a buffer and only print to your Serial port when the buffer is full.



Update

You might want to verify a few hardware things. The Tx pin of your module should be connected to the Rx pin of the Arduino, and the GND pin of your module should be connected to the GND pin of your Arduino. With those two connections in place you ought to be able to receive data from the transmitter without a problem assuming both the module and the Arduino are running at 5V. 

The next thing I would try, assuming the wiring is correct, would be to not use Software Serial at all. You only need to receive from your module and you only need to transmit to your computer by the looks of things. Just wire it up so that your Arduino Tx pin does not go to your module, and your Serial.print outputs should go to your computer terminal as usual. Module Tx = Arduino DIG0, Module GND = Arduino GND and just change your program to:

int next;

void setup()
{
  Serial.begin(38400);
}

void loop()
{
  if (Serial.available() &gt; 0)
  {
    next = Serial.read();
    Serial.print(next);
    Serial.print('\n');
  }
}


The only other thing I can suggest is that the manual may be inaccurate, and you could try the other common baud rates for your device interface (e.g. 9600, 14400, etc. - there are a small number) and see if things start decoding correctly.