Define components using the block diagram (Quartus version used 7.2)
Select the File->New menu, and the Block Diagram/Schematic File option.
If the diagram is for the top-level entity, name it the same as the project.
Double click the schematic working space (or click the Symbol Tool)
Either type the component's name into the Name field, or search it in the symbols tree.
Click the inserting position
Place the mouse near a pin until the cursor change into the Node Tool
With the mouse as the Node Tool, click, and drag the connection to its destination.
Avoid using connections at the edge of a component
Avoid nodes resulting from unwanted/unintended connections. Nodes are usually marked as dots on connectors.
Click the Start Compilation button
Resolve the errors of the design marked in the Messages frame. Most of the warnings can be ignored.