Heat oven to 400°F.

In large bowl, beat butter, ½ cup powdered sugar and the vanilla with electric mixer on medium speed until well mixed.

On low speed, beat in flour, salt and walnuts.

For each cookie, shape slightly less than 1 measuring tablespoon of dough around chocolate star to make 1-inch ball.

On ungreased cookie sheets, place balls 2 inches apart.

Bake 12 to 15 minutes or until set and bottoms begin to turn golden brown.

Meanwhile, in small bowl, mix sugar coating ingredients.

Immediately remove cookies from cookie sheets; roll in sugar coating.

Place on cooling racks; cool completely, about 30 minutes.

Roll in sugar coating again.