C# Signature:

[DllImport("advapi32", CharSet=CharSet.Auto, SetLastError=true)]
static extern bool ConvertSidToStringSid(
    [MarshalAs(UnmanagedType.LPArray)] byte [] pSID,
    out IntPtr ptrSid);

  [DllImport("advapi32", CharSet = CharSet.Auto, SetLastError = true)]
  static extern bool ConvertSidToStringSid(
      IntPtr pSID,
      [MarshalAs(UnmanagedType.LPTStr)] out string ptrSid);

VB Signature:

Declare Auto Function ConvertSidToStringSid Lib "advapi32.dll" (ByVal pSID() As Byte, _
   ByRef ptrSid As IntPtr) As Boolean

Notes:

As explained here, memory for the returned unmanaged string must be freed by calling LocalFree. Therefore, you must define the string as an IntPtr in managed code and call LocalFree yourself. Otherwise, the marshaler would call CoTaskMemFree which is not correct in this case.

Tips & Tricks:

Please add some!

Sample Code:

// C# sample
public static string GetSidString(byte[] sid)
{
   IntPtr ptrSid;
   string sidString;
   if (!ConvertSidToStringSid(sid,out ptrSid))
     throw new System.ComponentModel.Win32Exception();
   try
   {
     sidString = Marshal.PtrToStringAuto(ptrSid);
   }
   finally
   {
     LocalFree(ptrSid);
   }
   return sidString;
}

//Another C# Sample that converts a sid from a DirectoryEntry object

private string GetTextualSID(DirectoryEntry objGroup){
  string sSID = string.Empty;
  byte[] SID = objGroup.Properties["objectSID"].Value as byte[];
  IntPtr sidPtr = Marshal.AllocHGlobal( SID.Length);
  sSID = "";
  System.Runtime.InteropServices.Marshal.Copy(SID, 0, sidPtr, SID.Length);
  ConvertSidToStringSid((IntPtr)sidPtr, ref sSID);
  System.Runtime.InteropServices.Marshal.FreeHGlobal( sidPtr );
  return sSID;}    

  //Another C# sample that takes a WELL_KNOWN_SID_TYPE and returns the StringSid
  //on the local machine (i.e. domainSid always NULL).
  //This uses the second (alternate) PInvoke definition
  string GetWellKnownSID(WELL_KNOWN_SID_TYPE wellKnownSidType)
  {
      IntPtr domainSid = IntPtr.Zero;
      IntPtr pSid = IntPtr.Zero;
      uint cbSid = 0;
      string sidString = string.Empty;

      NativeMethods.CreateWellKnownSid(wellKnownSidType, domainSid, pSid, ref cbSid);

      pSid = Marshal.AllocCoTaskMem(Convert.ToInt32(cbSid));
      if (NativeMethods.CreateWellKnownSid(wellKnownSidType, domainSid, pSid, ref cbSid))
      {
      NativeMethods.ConvertSidToStringSid(pSid, out sidString);
      }

      Marshal.FreeCoTaskMem(pSid);

      return sidString;
  }

'VB Sample
Public Shared Function ByteArrayToStringSid(ByRef bArray As Byte()) As String
   Dim ptrSID As IntPtr = Nothing
   Try
     Dim sSID As String = String.Empty
     If ConvertSidToStringSid(bArray, ptrSID) = True Then
       'The PtrToStringXXX call here needs to match the CharSet used on your
       'ConvertSidToStringSid DllImport.  The default is CharSet.Ansi.
       sSID = System.Runtime.InteropServices.Marshal.PtrToStringAnsi(ptrSID)
     End If
     Return sSID
   Finally
     LocalFree(ptrSID)
   End Try
End Function

Alternative Managed API:

Do you know one? Please contribute it!