Line 8-inch square pan with foil, leaving 1 inch of foil overhanging at two opposite sides of pan. Grease foil with butter.
Place white chocolate and butter in medium microwavable bowl. Microwave uncovered on 70% power 1 minute 30 seconds to 2 minutes, stirring after 1 minute, or until chocolate is almost melted. Stir until chocolate is completely melted and mixture is smooth. Stir in 2 cups of the crushed cereal until completed coated; press in pan. Set aside.
In 2-quart saucepan, heat milk, chocolate chips, unsweetened chocolate and vanilla over low heat stirring constantly, until chocolate is melted and mixture is smooth; remove from heat. Gently spread over white chocolate layer. Sprinkle with 1/3 cup crushed cereal; press in gently. Sprinkle with powdered sugar. Refrigerate about 1 hour 30 minutes or until firm. Remove fudge from pan, using foil edges to lift. Cut into 8 rows by 6 rows. Store in plastic container with lid in refrigerator up to 2 weeks (place waxed paper or plastic wrap between layers and cover top layer before placing lid on top).