Combine cake mix, pudding mix, water, eggs and oil in large mixer bowl. Blend; beat at medium speed for 4 minutes.
Stir in coconut and nuts.
Pour into greased and floured 11 cup ring mold or 10-inch tube pan. Cool on rack.
For Coconut Cream Cheese Frosting, cream butter; blend in cream cheese. Add powdered sugar, alternately with milk, beating well after each addition. Add vanilla.
Spread frosting over top and sides of cake. Sprinkle coconut over frosting.