To prepare filling, combine cream cheese, half whipped topping, and vanilla extract in a mixing bowl. Mix until smooth; set aside. In another mixing bowl, combine pumpkin, dry pudding mix, dry milk powder, and water. Mix well. Fold in pumpkin pie spice and remaining whipped topping. Spread half of the pumpkin mixture into crust. Evenly spread cream cheese mixture over pumpkin layer, and spread remaining pumpkin mixture over the cream cheese mixture. Sprinkle walnuts evenly over top. Refrigerate for for two hours.