Using an electric mixer, cream the butter and sugar together for several minutes until thoroughly mixed. Add the water and vanilla, and mix together. Slowly add the flour (the dough will become very thick). Stir in the nuts.

Cover the dough with plastic wrap and refrigerate for 2-3 hours in refrigerator.

Preheat oven to 325 degrees. Remove dough from refrigerator. Spoon out and roll dough in your hands to make 1" round cookie dough balls.

Bake snowballs on un-greased baking sheets for 15-20 minutes at 325 degrees, or until just slightly browned. Remove cookies from oven; let cool just a minute, then carefully roll each cookie in a bowl of powdered sugar, to cover. Cool on a wire rack. Once cool, coat them a second time with the powdered sugar, if desired. That's it!