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In top of double boiler, melt chocolate and butterscotch together with milk. Stir occasionally until mixture begins to thicken. Remove from heat; add chopped walnuts and vanilla. Blend well. Chill for 1 hour until mixture thickens. Line bottom of a 9-inch pan, with a 12-inch square of foil. Place 3/4 cup walnut halves in bottom of pan, forming a 2-ich-wide flat ring. Spoon chocolate mixture in small mounds on top of walnuts to form a ring. Top with remaining walnut halves. Chill until firm enough to slice. Invert onto a serving plate and garnish with maraschino cherries.