PROBLEM interfacing ARDUINO with ALTERA DE2-70 board using RS232

PaulS:
If you have anything connected to pins 0 or 1 when you try to upload a file, you will get that message. You can not have anything connected to those pins WHILE UPLOADING.

It sounds like you do have something connected to the serial pins.

So what you are saying is, upload first and then connect the PINS afterwards?