Place squash in a medium saucepan; cover with water, and bring to a boil. Cover and cook 15 minutes or until tender. Drain well.
Combine squash and next 6 ingredients (squash through egg white) in a blender, and process until smooth. Divide squash mixture evenly among 6 (6-ounce) custard cups coated with cooking spray. Place cups in a 13 x 9-inch baking pan; add hot water to pan to a depth of 1 inch. Bake at 325° for 30 minutes or until a knife inserted in center comes out clean. Remove cups from water; let stand 5 minutes.
Loosen edges of custard with a knife or rubber spatula. Invert custard cups onto individual plates. Sprinkle with nutmeg, and garnish with watercress, if desired.