Combine sugar, water, and vanilla in small mixing bowl. Add egg and chocolate; mix well. Add butter, a Tbs at a time, beating thoroughly with electric mixer after each addition. If mixture is thin and soft after last addition of butter, place bowl in pan of ic water. Continue to beat until reaches spreading consistency. Stir in nuts.

Will cover 2 8- or 9-inch layers or tops of 3 dozen cupcakes or 1 bundt cake.