Altera first timer noob

Ok, as a total newbie, maybe at first you should try to get a little familiar with Quartus II, SOPC Builder (to include a Nios II processor) and the Nios IDE.

Therefor you could start with the Quartus II Tutorial (-> Help -> Tutorial) to get an overview about the possibilities you have with that tool. You will not understand every single step and you will not need every detail, but it's a good starting point.

Then I would suggest to do the Nios II Hardware Developement Tutorial, because there you find a step-by-step instruction on how to develop a system with Nios II on the basis of an example.

After that you should already have some ideas on what you could do. For analyzing the feasibility and sense of these ideas you could read the according parts in the FPGA Device Handbook (e.g. Cyclone II Device Handbook), the Nios II Processor Reference Handbook, Nios II Software Developer's Handbook, the Quartus II Handbook Volume 4 for SOPC Builder explanations and Volume 5 for Embedded Peripherals (e.g. about UART Core ...). Of course reading all of this handbooks is impossible and senseless, but picking out the parts you need helps usually to learn about it.

What you could also do, is asking that other student, whether he would let you see/check out his software, just to see the structure, what parts he uses, etc. And/or you could check out one/some of the examples that come with the installation. There are some Quartus II project examples under ..\altera\xy\nios2eds\examples\verilog or \vhdl for several FPGA types. Additionally there are some Nios II projects under ..\altera\xy\nios2eds\examples\software which can be used as starting point.

Hope that helps.