In medium saucepan, bring 1 cup water, butter and salt to a boil. Add 1 1/3 cups mashed potato mix, 1 egg and chives; mix well. Let stand 30 seconds. Stir. Cool 10 minutes.
Meanwhile, heat oven to 400°F. Spoon mashed potatoes into 24 mounds, about 1 tablespoon each, onto ungreased cookie sheet. Flatten into disks. Place 1 cheese cube in center of each potato disk. With pancake turner, remove each disk from cookie sheet; pinch potatoes around cheese cube to form ball.
In small bowl, beat 1 egg and 1 tablespoon water until well blended. Place 1 cup mashed potato mix in another shallow dish or bowl. Roll balls in potato mix, then in egg mixture and again in potato mix. Place on ungreased cookie sheet.
Just before baking, spray coated potato balls with nonstick cooking spray. Bake at 400°F. for 10 to 12 minutes or until potato coating just begins to brown. Serve immediately.