In mixing bowl, stir together cream cheese, Muenster cheese, chopped pepperoni, and milk. Shape cheese mixture into a 4 inch ball. Flatten the ball into a wheel shape measuring about 4 1/2 x 1 1/2 inches.
On waxed paper combine paprika and red pepper. Roll and pat cheese wheel in paprika mixture till well coated. Cover and refrigerate for 3 hours to 1 week. OR, wrap the cheese wheel in moisture and vapor proof material. Seal, label and freeze for up to 3 months. Before serving, thaw the cheese wheel overnight in the refrigerator.
Use sharp knife to score the top of the cheese wheel into diamonds. Serve with crackers or melba toast.