where do I start?

As I said previously, the Altera Cyclone II starter kit is a good place to, well, start. If you want to put a microcontroller on the FPGA you can do that too, but it gets a bit more complicated (and I'm not an expert in this area). Nios is basically of software package that you can load into an FPGA that implements a microcontroller. You pay an additional license fee to use Nios in a product (over the cost of the chip). I'm not sure whether one can do this on the starter kit, but you can on the regular dev boards, lsuch as the Cyclone III board.