printf Problem with custom Board and NIOS II

Have you adjusted any of the compiler settings in the IDE? (like small C library, optimization strength, etc....)

Another quick test is to open the hardware reference design in the hardware tutorial section and bring the hello world program into the software compile and just take a look at the various settings to see if there are any noticeable difference between your design and the ref. design.

I'm sure you wouldn't have done this but are you making sure that you're printf statements use terminated strings ("Hello World" or if you prepared the string character-wise that you have the \n character at the end (that's what tells printf to stop outputing characters)).

Another question is when the algorithm freezes, do you see anything get communicated across via serial (jtag or RS232)?

And lastly could you describe you're memory structure further (ie, onboard, offboard, ram, rom, flash, etc..... and portions reside in each)