Heat butter in a medium saucepan over medium heat. Add orzo, and cook 3 minutes, stirring constantly. Stir in broth and water; bring to a boil. Reduce heat, and simmer until liquid is absorbed and orzo is done (about 15 minutes). Remove from heat; stir in cheese, basil, salt, and pepper. Sprinkle with the pine nuts. Serve immediately.
One of my go-to side dishes. I fix this at least twice a month because it goes well with so many things. I do add a bit more cheese than calls for. I also make this without the pine nuts and fresh basil in a pinch, adding those two ingredients put it over the top.