Soft Processors in FPGAs?

cybergibbons asks: "We're students in the Department of Electrical and Electronic Engineering, Imperial College, and are carrying out some research for Altera into FPGAs, softcore processors, and hardware software co-design. Most embedded systems are a combination of hardware (for performance) and software (for versatility), and the design of these systems is getting more and more complex. Previously, the hardware and software was partitioned at the early stages of design, leading to sub-optimal solutions. New languages such as SystemC and Handel C aim to merge the hardware and software design with one common language combining the high level algorithm design and low level RTL design ? the ultimate goal being to allow conventional C++ programs to be synthesized directly into working systems, without any human intervention. However, what we seem to have found is a lot of marketing spiel and conceptual papers with no practical ideas. Is anyone using any of these new tools? Are any of the current co-design tools any good? Do you think a computer can partition designs effectively into hardware and software? What features would you like to see in future tools? Do you envision any amazing new applications for FPGAs using new co-design tools?"