Preheat oven to 350°. Grease two 13x9-in. baking pans., In a large bowl, cream butter, sugar and peanut butter until light and fluffy. Add eggs, one at a time, beating well after each addition. Beat in vanilla. In another bowl, whisk flour and baking powder; add to creamed mixture alternately with water and milk, beating well after each addition., Transfer to prepared baking pans. Bake 20-25 minutes or until a toothpick inserted in center comes out clean. Meanwhile, for frosting, in a large bowl, beat peanut butter and butter until blended. Beat in confectioners’ sugar alternately with enough milk to reach spreading consistency., Remove cakes from oven; place on wire racks. Spread frosting over warm cakes; sprinkle with peanuts. Cool completely.