Hi Mumble,
I found this link (
http://cygwin.com/ml/cygwin-announce/2006-12/msg00026.html).
Keep in mind that the Altera monitor program is _not_ the recommended flow and is not (well) maintained from release to release. The recommended flow is to either use the command line based software build tools (SBT) or one of the two supported GUI flows (Software Build Tools for Eclipse or Nios II IDE).
You may want to ensure that you're using the correct version of the Altera tools as the monitor is only meant to work with specific Altera tool versions.
Regards,
-slacker