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Preheat oven to 325 degrees F. Grease and flour two round cake pans. Sift flour, baking powder, and salt.
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Cream 2 cups of the butter and the granulated sugar until fluffy. Add eggs one at a time, beating well after each addition. Mix in flour mixture alternately with cream. Stir in 1 tsp vanilla extract, walnuts, and 2 cups of the baking baking chips. Pour batter into prepared pans.
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Bake at 325 for 60-90 minutes, until done. Meanwhile, combine cream cheese, remaining butter, and powdered sugar and blend until smooth. Melt 1/2 cup of the remaining white chocolate chips in the microwave, and add to frosting with remaining tsp of vanilla.
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When cakes are cool, place one layer on cake pan, frost with cream cheese frosting, top with second layer, and frost cake completely. Sprinkle remaining 1/2 cup of white chocolate chips on top, to garnish. Refrigerate 1-2 hours before serving.