How to read text file by particular line separator character?

I would implement something like George's answer, but as an extension method that avoids loading the whole file at once (not tested, but something like this):

static class ExtensionsForTextReader
{
     public static IEnumerable<string> ReadLines (this TextReader reader, char delimiter)
     {
            List<char> chars = new List<char> ();
            while (reader.Peek() >= 0)
            {
                char c = (char)reader.Read ();

                if (c == delimiter) {
                    yield return new String(chars.ToArray());
                    chars.Clear ();
                    continue;
                }

                chars.Add(c);
            }
     }
}

Which could then be used like:

using (StreamReader sr = new StreamReader(FileName, Encoding.Default))
{
     foreach (var line in sr.ReadLines ('\n'))
           Console.WriteLine (line);
}

string text = sr.ReadToEnd();
string[] lines = text.Split('\r');
foreach(string s in lines)
{
   // Consume
}

I loved the answer @Pete gave. I would just like to submit a slight modification. This will allow you to pass a string delimiter instead of just a single character:

using System;
using System.IO;
using System.Collections.Generic;
internal static class StreamReaderExtensions
{
    public static IEnumerable<string> ReadUntil(this StreamReader reader, string delimiter)
    {
        List<char> buffer = new List<char>();
        CircularBuffer<char> delim_buffer = new CircularBuffer<char>(delimiter.Length);
        while (reader.Peek() >= 0)
        {
            char c = (char)reader.Read();
            delim_buffer.Enqueue(c);
            if (delim_buffer.ToString() == delimiter || reader.EndOfStream)
            {
                if (buffer.Count > 0)
                {
                    if (!reader.EndOfStream)
                    {
                        yield return new String(buffer.ToArray()).Replace(delimiter.Substring(0, delimiter.Length - 1), string.Empty);
                    }
                    else
                    {
                        buffer.Add(c);
                        yield return new String(buffer.ToArray());
                    }
                    buffer.Clear();
                }
                continue;
            }
            buffer.Add(c);
        }
    }

    private class CircularBuffer<T> : Queue<T>
    {
        private int _capacity;

        public CircularBuffer(int capacity)
            : base(capacity)
        {
            _capacity = capacity;
        }

        new public void Enqueue(T item)
        {
            if (base.Count == _capacity)
            {
                base.Dequeue();
            }
            base.Enqueue(item);
        }

        public override string ToString()
        {
            List<String> items = new List<string>();
            foreach (var x in this)
            {
                items.Add(x.ToString());
            };
            return String.Join("", items);
        }
    }
}