1) In a large bowl, cream the butter and sugar until light and fluffy. Beat in vanilla. Gradually add flour. Stir in nuts if desired. Knead dough until it is smooth and elastic. Cover and refrigerate for 1 hour or until easy to handle.
2) In a small bowl, beat the cream cheese, sugar, milk, candy and food colouring if desired. Roll tablespoonfuls of dough into balls. Using the end of a wooden spoon handle, make a deep indentation in the center of each.
3) Fill with ¼ teaspoon filling. Cover with ¼ teaspoonfuls of dough, seal and reshape into balls. Combine topping ingredients; roll balls in topping.
4) Place 1 inch apart on ungreased baking sheets. Bake at 350 degrees for 12-14 minutes or until firm. Roll warm cookies in remaining topping; cool on wire racks.