DE2-70 LCD screen? Header not found? Where does altera eclipse put header files?

OK, much better. Undefined reference means that when the linker was trying to create your executable it couldn't find alt_up_character_lcd_open_dev. So you need to add the code for that routine to your build. To add a source file to your build, either copy it to your project directory with your other source or drag it from windows explorer to your project in eclipse. After doing that, delete your objects directory (probably Debug or Release) so that the makefile is recreated and then your build should work.