You are mixing both languages together, that's not allowed.

Try this...

Code:
var fhandle;
STRING* test_str;

void main()
{
video_mode = 7; 
wait(1);
vec_set(screen_color,vector(150,0,0));
fhandle = file_open_read("test.txt"); 
file_str_read(fhandle,test_str); 
file_close(fhandle);
}