Co HW/SW Nios II Processor Simulation

Hi,

I am trying to simulate a Nios II processor design with actual C source code. I've learned how to create a testbench using Nios II IDE, but what I'm puzzled by is how can I control the code while the simulation is running (i.e. exercise that part of the code that I want to test such that the correct PIO is stimulated)? Do I need to create a subset of the code and use that for the simulation? Is there a setting within Nios II IDE that I should be aware of?

Thanks,

Tony