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I think download won't work in any of the DE2-70 NIOS samples when using Quartus 8. The scripts set some environment variables specific for previous Quartus versions, not for version 8.
In the case of the control panel you must modify the "NiosDownloadBatch.bat" file.
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Right. Or you could simply do what I suggested, launch it from the Nios II shell. Likely to be much simpler than figuring out which environment variables to fix.
I actually started down that road first, but AFAICT, one of the problems is that the script assumes all of the EDS to be in the PATH (eg. nios2-download). Simply adding the bin directory wasn't enough at which point I figured it wasn't worth my time.