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I recommend always using relative pathnames for files that maintain a fixed directory relationship with respect to the Quartus project directory if the project is moved to a different location. Use absolute pathnames only for files that stay in the same absolute location when the project is moved.
I've experimented with this for memory initialization files in particular, but I don't remember what I figured out, and there was some sort of bug at the time that might have been fixed by now. (I think the bug had to do with using user library settings to tell Quartus where to find this kind of file.) Experiment to see how it works now (unless someone else posts the answer to that). You will have altsyncram or another memory megafunction instantiated somewhere. The instantiation will have a parameter or generic that identifies the memory initialization filename with a possible pathname shown there. The way Quartus uses a relative pathname stated at the instantiation might be relative to the directory containing the instantiating RTL file, relative to the project directory, or both (with Quartus looking for the initialization file in both locations--I think I've seen this behavior for some sort of file).
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Hi dane, hi Brad
in the past there was some trouble with relative pathname for the MIF-files. I run run atest with Quartus 8.1 and it lookslike that the problems are solved. The MIF file is always found by the path defined in the Megawizard.
Kind regards
GPK