Combine the first 4 ingredients in saucepan. Bring to full rolling boil over moderate heat and stir constantly. Boil for 6 minutes over moderate heat and stir occas. Remove from heat.
Stir in 1 1/2 cups min. marshmellows, 3/4 cup chopped nuts, 1 teaspoon vanilla and stir until marshmallows are melted and mix well to blend. Pour 2 cups of mixture into another bowl and add the semi-sweet chips, stir until morsels are melted. Pour evenly into greased 8 x 8 pan.
To the remaining mixture stir in 6 oz. pkg milk chocolate chips, stir until melted and spread on top of the semi-sweet mixture. Chill until firm about 4 hours.