sudoku,
i had a simlar issue with the control panel, it seems to have gone away now though..
A few notes though, the first error "Fail to connect FPGA Board - Please Click the 'Download Code' button to download control code for your board" is fine.. this is not a glitch... its just telling you that the control panel isn't connected to the board yet..
also, after you click the 'download code', don't do anything on your computer while its downloading (i.e. don't switch window to browse the net)... this might seem irrelevant, but trust me, it solved my problem... this is gonna be kinda annoying though if you test out the music playback feature from the control panel since it takes it about 5 minutes to transfer a full .wav file from the control panel to the DE2-70.. and even clicking away from the window for a few seconds can make the transfer fail for some reason..
good news is that this only happens when you're doing stuff with the control panel and their image/video utility.. when transfering stuff from Quartus, i can play a game while waiting for the stuff to transfer no problems..
tommy's advice is good as well, make sure your Quartus works and the usb blaster driver is installed, you might want to make a very simple file in Quartus and try to transfer it to your DE2-70 board (2 inputs from the swtiches through an AND gate and output the result on a LED is a very simple circuit that you can use to test)..