Help. Hardware tutorial does not run on Cyclone II Starter Dev Kit

eliehrman, I know your post is very old but I would like to post the workaround that worked for me when I was troubleshooting the same problem that you are having. Even if you don't click 'Cancel' on the message "Click Cancel to stop using Open Core Plus IP," it still fails to work and gives the exact error message you posted.

The trick is do exactly (verbatim) as BD_SLS stated. That is, close Nios II IDE (or Software Build Tools for 9.1), then program the FPGA with your time-limited .sof in the Quartus II Programmer, then don't click on 'Cancel', and then run Nios II IDE (or Software Build Tools). I tested this several times today, and it worked consistently. In case you would ask me... this is not documented anywhere as far as I know.

BTW, I am using the latest development kit (Stratix IV E Dev Kit) and the Nios II Software Build Tools 9.1. More than two years later, Altera still did not fix this. Amazing...