Jedi,
Sorry I did not see this sooner. I just tried a test with Nios II 5.0 of the timer peripheral -- starting with a 10ms period as you indicated, and tried an experiment to modify the timer period as well as take snap-shots based on pressing/releasing a button on my dev board. It all worked fine. Send me an email if this is still a problem and I'll send you the source code I'm using for the test!
One scenario that comes to mind that may have caused this is that if your code is not setup to use I/O instructions to peripherals (recommended for all Nios II software), and you're using the data cache: there have been modifications to the Nios II data cache in 5.0
-- whether you're using the data cache or not its best to ensure that you're doing an "I/O" read/write to external peripherals rather than simple load/store (as you'd get with a regular pointer dereference). This stuff is described in the Nios II Software Developer's manual.
Jesse Kempa Altera jkempa -at- altera -dot- com