Mix sugar, cocoa and milk in a sauce pan. Add margarine and bring to a boil. Boil for 1 minute, then remove from heat. Add peanut butter, oats, vanilla and nuts if you like them. Stir quickly and drop by spoon fulls on wax paper.

With an electric mixer, beat together the butter (or margarine) and sugar. Then add the egg and vanilla extract. Beat the mixture well and then set it aside.
In another bowl, sift together the flour, baking powder, and salt. Mix the flour mixture with the first mixture a little at a time, while gradually adding milk.
Knead the cookie dough about a quarter at a time until it is blended smoothly. Roll the dough out on a lightly floured board until it is about 1/8 inch thick. Cut the dough into different shapes. You can use cookie cutters for this, or you can simply cut out your own shapes with a knife.
Place the shapes on a lightly greased cookie sheet. Bake in a preheated oven at 375 degrees Fahrenheit for 10-12 minutes. Allow to cool before frosting.

Blend these ingredients together until they are smooth. If you want, you can add food coloring to make festive red or green frosting. If the mixture is too thick, try adding a few drops of milk. If the mixture is too thin, add a few more spoonfuls of sugar.

Beat butter at medium speed with an electric mixer until creamy; gradually add sugar, beating well. Combine flour, baking powder, and salt; add to butter mixture alternately with milk, beginning and ending with the flour mixture. Beat at low speed until blended after each addition. Stir in vanilla. Beat egg whites until soft peaks form; fold into batter. Pour batter into 3 greased and floured 9-inch round cake pans. Bake at 375 Fahrenheit for 25 to 30 minutes or until a wooden pick inserted in center comes out clean. Cool in pans on wire racks 10 minutes; remove from pans, and cool completely on wire racks. Pierce "eyes" at end of coconut with an ice pick. Pour liquid through a fine wire-mesh strainer into a 1-cup liquid measuring cup; add enough water to measure 1 cup, if necessary. Set liquid aside. Crack coconut, and shred with a grater or food processor. Cook coconut liquid and 2 to 3 tbsp sugar in a small saucepan over medium-low heat, stirring constantly, until sugar is dissolved. Remove coconut syrup from heat. Place 1 cake layer on cakeplate; drizzle with 1/4 cup coconut syrup. Spread 1 cup Seven-Munute Frosting over cake, and sprinkle with 1/4 of coconut. Repeat procedure with second cake layer, 5 tbsp coconut syrup, and 1 cup frosting. Top with third cake layer; drizzle with 1/4 cup coconut syrup. Spread top and sides of cake with remaining frosting; press remaining coconut onto top and sides of cake. Drizzle remaining 3 tbsps coconut syrup over top of cake. Cover and chill at least 24 hours.

Combine all ingredients in top of a large double boiler; beat at low speed with a handheld electric mixer until blended. Place over boiling water, beating at high speed 7 minutes or until soft peaks form; remove from heat. Beat to spreading consistency. Spread immediately over cooled cake. Yield: 4 1/2 cups.