Heat oven to 350 degrees. Beat sugar, peanut butter, and margarine until fluffy. Blend in water, egg, and vanilla; add combined dry ingredients, mixing well. Shape into 1-inch balls. Place on ungreased cookie sheet; flatten with glass dipped in sugar. Bake 8-10 minutes or until golden brown. Cool completely.

In a saucepan over low heat, melt chocolate and shortening, stirring constantly until smooth. Or place chocolate and shortening in a glass container; microwave at HIGH 1 to 2 minutes, stirring after 1 minute and then every 30 seconds until smooth. Top each cookie with 1/2 tsp. chocolate; sprinkle with nuts. Chill until set.
Yield: About 6 dozen cookies