Problem with nios2 ide under windows 7

I am having exactly the same problem. Searching the web, many others are having this problem. There is something wrong with Cygwin under Windows 7, and it needs fixing. I have done these things to no avail:

1. Made a DW in /HKLM/Software/Cygnus Solutions/Cygwin/heap_chunk_in_mb 1024 (and 2048)

2. Totally eliminated Logitech quickcam including the services process Monitor or Injector Service from my PC.

3. Formatted my hard drive, re-installed Win 7, installed just Office 2007, followed by Quartus and Nios IDE.

4. Tried both Nios IDE 7.2 Sp2 and Nios IDE 11.0 SP1. (I'm trying to maintain a legacy project that has been out there for some years).

5. Tried to run the IDE in XP, Vista compatability modes.

6. Tried to run the IDE as an administrator.

I have no virus checker (eg McAfee or Bit defender - they were got rid of in the reformat). I do not have Sonic, Zonealarm, Kerio or Agnitum.

I do have ATI catalyst drivers running (necessary for this HP i7 machine).

I would really appreciate some help, as at the moment I can do no further program maintenance, and Nios is effectively garbage.

Thanks.