Nios Open Source Alternatives?

I'm not sure I'd want to run Linux on the nios - far too slow.

But it you have something that has to be done every (say) 100 clocks and has some complex conditionals then the cpu variant will be easier to write and probably use less logic overall.

I guess the real trick is to use a mixture of both.

There are also things like TCP connection processing that you won't really manage completely in vhdl (UDP probably can be done in vhdl). OTOH I suspect there are much smaller TCP implementations than the usual lurking culprits - I'd start with something from the early 1980s and cut out the unwanted bits!