Quartus II Web Edition will allow you to create .sof/.pof programming files for your Cyclone III design. Quartus II Web Edition is limited mostly supporting only the low cost device families like Cyclone, but the Subscription Edition does have a few "nice to have" features which are outlined here:
http://www.altera.com/literature/po/ss_quartussevswe.pdf the Nios II/f core will require a license, but you can simulate it and evaluate on board using OpenCore Plus (along with most of the other Altera IP cores). you will need a license to go into production and create programming files for the configuration flash
EPCS is much easier than CFI for configuration