Heat oven to 400°F. Lightly spoon flour into measuring cup; level off. In large bowl, combine flour, 1/2 cup powdered sugar and salt. Using pastry blender or fork, cut in butter until mixture resembles coarse crumbs. Add walnuts and vanilla; mix with hands to form a smooth dough. Using about 1 tablespoonful dough for each, shape into 2 1/2-inch fingers. Place on ungreased cookie sheets.
Bake at 400°F. for 5 to 7 minutes or until set and light golden brown. Cool 1 minute; remove from cookie sheets. Carefully roll in 1/4 cup powdered sugar; cool.