I have lots of Xilinx experience but nearly zero Altera experience. Oops, maybe I should say Intel...
I have someone else's source code for a legacy project designed to run on an embedded linux processor on an Altera FPGA. It seems to be a "NIOSII Processor". I think I've found the correct sub-forum.
I would like to do a test build of the project in order to make sure I have a fully buildable copy of the source code. Must I do that test build on the actual embedded linux processor on the FPGA, or might I do that build on my own unrelated linux PC, like a cross-compile?
As you say it is legacy design. I advise you to follow the normal procedure of downloading a cross compiler ex: from Linaro, the Linux you want to compile and compile all the required files (U-boot, RFS, Linux, and DTS). The Quartus will help you to get the system .sof file to configure the FPGA.