My sister, Susan, showed me how to make these back in the sixties and I used to make them at Christmas time as gifts. They are a lot of fun to do because you can make one batch, separate it into different portions and color and flavor each portion as you wish. Then when you are all done... dip them into melted chocolate and Wow! Folks will think you are an excellent candy maker!!
soften cream cheese in microwave -- don't melt, simply soften -- about 30 seconds
begin to add powdered sugar by cup fulls -- work into cream cheese until it gets to be like a firm batter -- play dough would be a good example of the consistency you are looking for -- and you will end up having to do it with your hands
separate the ball into as many different flavors as you would like to make -- I used to make at least 4 or 5 at a time. (Suggested flavors that people liked: vanilla, almond, mint, anise, chocolate, rum, cherry, orange, lemon, etc -- whatever you have in your cupboard or desire to purchase for this project.)
To Flavor: make a deep thumb print in one of the balls and put in a drop or 2 of coloring and a tsp of flavoring -- begin working the ball with your hands until the color is smoothly distributed -- add more powdered sugar to bring back to workable dough that is not sticky. (I liked the colors to be pastel which I always thought were more appetizing so I never added more than 1 or 2 drops of food coloring -- you may do as much as you want.)
After each ball is colored and flavored I used to decide on a different shape for each flavor so I could tell which ones were which after they were all coated with chocolate. Such as: tiny balls for one flavor, little squares for another, oblong balls for another, rectangles for another, flattened balls for another, etc.
Slowly & carefully melt chocolate on low heat on stove top (or in microwave if you are comfortable with that -- I like the stove top because I have more control over the process) -- then dip each ball or shape into the chocolate and place on waxed paper covered cookie sheets. They will harden very quickly. I did not like to get my hands all chocolate covered so I always used a spoon to dip, and roll in the chocolate, then scoop out and place on waxed paper.
After I had made these over the years, I also began to experiment with chocolate coating things that were already made (I was getting lazy LOL). One of my most favorite things was to chocolate coat gum drops. Candy manufacturers used to make chocolate covered "jellies" which I always loved... but they began to disappear over the years... gum drops were a perfect solution for someone who missed them!!
I also found that I could chocolate coat dried pineapple, or mix peanuts with the chocolate to make little peanut heaps. We used to make "hay stacks" by dumping those hard canned Chinese noodles into chocolate and making little stacks. My sister used to like a Chunky candy bar and we made our own with peanuts and raisins in chocolate dropped by spoonfulls on waxed paper.
Other people like to coat pretzels and crackers and cookies... once you get started with chocolate coating things you will find lots of individual and unique ways to make Christmas gifts that your friends will get from no other source. They will be clamoring for your home made creations. Enjoy!