Thanks Adam,

I was wondering then, what would be a better way to do this - 

(with-output-to-file "output.txt"

  (lambda ()

    (display

     (call-with-input-process

      program

      (lambda (port)

(read-line port #f))))))

If I understand it right, this requires an extra read and write. If Gambit lets the port be overridden by the surrounding with-output-to-file, perhaps the whole thing could be achieved without the extra read and write. Hence my question was more about whether there is a problem with this approach that I am not able to see.