Preheat oven to 350 degrees F (175 degrees C). Grease and flour a 10 inch tube pan.
In a large bowl, cream 1 cup butter, shortening, brown sugar, and white sugar. Add eggs, one at a time, beating well after each addition. Sift together flour, baking powder, and salt, and add alternately with milk to the creamed mixture. Stir in 1 teaspoon vanilla and 1 cup black walnuts. Pour batter into prepared pan.
Bake in the preheated oven for 80 to 90 minutes, or until a toothpick inserted into the center of the cake comes out clean. Allow to cool.
In a mixing bowl, cream together cream cheese and 1/4 cup butter. Add confectioners' sugar, beat well. Stir in 1 teaspoon vanilla. Frost cooled cake, and sprinkle with 1/2 cup nuts.