1. Preheat oven to 350°. Cut 1/2 cup butter into 1 cup flour until crumbly; stir in 1/4 cup cold water. Form dough into a ball, and divide in half. On a greased baking sheet, pat each half into a 3- x 11-inch rectangle, spacing 4 inches apart.
2. Pour 1 cup water into a saucepan; bring to a boil. Remove from heat. Add 1/2 cup butter, stirring until butter melts completely. Add 1 cup flour, stirring vigorously until thick. Add eggs, 1 at a time, and beat well after each addition. Beat in almond extract. Drop mixture in heaping tablespoonfuls on top of each rectangle, covering top and sides.
3. Bake at 350° for 1 hour or until golden brown. Remove from oven, and immediately brush with jam. Stir together powdered sugar, vanilla, and milk to make a thin frosting. When puffs cool, drizzle with frosting. Sprinkle with chopped nuts, if desired.