Nios II Recovery Problem

This isn't a problem -- it just indicates that the "special" area of flash that we picked in our example designs to store things like the board MAC address got erased. Products that would be developed for an end-user would typically have this sort of thing in a one-time-programmable flash memory, but for the dev boards, we had to use a part of conventional (erasable) flash.

What you need to do is open a console to the board with nios2-terminal when you reset Nios - this will display a prompt asking for your board's serial number. We run a simple algorithm to calculate a new, unique MAC address from Altera's "pool" that are allocated to Nios boards, and stores this address into flash. You won't need to do this again unless the last flash sector is erased.