This error may occur when running the Nios II IDE on Windows XP. To resolve the error, change the following two lines of the file \<Quartus II Root Directory>\sopc_builder\bin\europa\e_project.pm:
Line 4694:
Change
"--boot=\`\$(QUARTUS_ROOTDIR)/sopc_builder/bin/find_sopc_component_dir \$(CPU_CLASS)\`/\$($boot_copier_macro) " .
to
"--boot=\$(shell \$(QUARTUS_ROOTDIR)/sopc_builder/bin/find_sopc_component_dir \$(CPU_CLASS))/\$($boot_copier_macro) " .
Line 5237:
Change
"\`\$(QUARTUS_ROOTDIR)/sopc_builder/bin/find_sopc_component_dir $board_class\`/" .
to
"\$(shell \$(QUARTUS_ROOTDIR)/sopc_builder/bin/find_sopc_component_dir $board_class)/" .
This modification removes the ( ` ) or "backtic" characters from those lines and replaces them with $(shell ). It is the backtics that cause the error on some Windows XP systems.