In a mixing bowl beat the butter and cream cheese with an electric mixer. Add the sugar and baking powder and beat until well combined. Add the egg and vanilla and start adding flour as much as you can mix with the mixer. Stir in remaining flour with a wooden spoon, if needed. Divide the dough in half and cover each half in plastic wrap. Chill for 3 hours.
Roll each half of the dough into a 10 in square. If you have a pastry wheel use it to cut each square into sixteen squares, otherwise just use a knife. Place on an ungreased baking sheet. Use a knife to cut 1 inch slits from each corner to center. Fold every other tip to the center to form a pinwheel. Drop 1/2 tsp of the jam in each center. Sprinkle chopped nuts in the center and press firmly to seal.
Bake in a preheated 350 oven for 8 to 10 minutes or until lightly browned. These are absolutely adorable looking and taste just as great.