1. Line 8-inch square pan with foil.
2. Place butterscotch chips and 1/3 cup sweetened condensed milk in small microwave-safe bowl; set aside.
3. Place chocolate chips, remaining sweetened condensed milk and vanilla in medium microwave-safe bowl. Microwave at MEDIUM (50%) 1 minute; stir. If necessary, microwave at MEDIUM an additional 15 seconds at a time, stirring after each heating, until chips are melted. Stir in walnuts. Spread evenly in prepared pan.
4. Microwave butterscotch chip mixture at MEDIUM 30 seconds; stir. If necessary, microwave at MEDIUM an additional 10 seconds at a time, stirring after each heating, until chips are melted. Spread evenly over chocolate layer. Refrigerate until firm. Remove from pan; place on cutting board. Peel off foil; cut into squares. Store tightly covered in refrigerator. About 4 dozen pieces or 2 pounds.
NOTE: For best results, do not double this recipe.