Mix butter (softened), nuts and flour in a ball. Spread on bottom and up sides a little of a 9 x 13 inch pan that has been sprayed with Pam. Bake at 350 degrees for 20 minutes. Cool.
Mix together sugar and cream cheese. Spread over cooled crust. Prepare pudding using 3 cups of milk. Spread over cream cheese mixture. Top with Cool Whip. Dot with cherries. Chill.