COMBINE flour and salt; set aside. Beat butter and cream cheese in medium bowl until light and fluffy. Stir in flour mixture by hand just until blended.
DIVIDE dough into fourths, wrap in plastic wrap; chill several hours or overnight.
HEAT oven to 400ºF. Spray baking sheet lightly with no-stick cooking spray.
COMBINE apricot preserves, coconut and walnuts; set aside. Roll one fourth of dough at a time on floured pastry cloth or other floured surface into an 8 x 10-inch rectangle. Cut rolled dough into 2-inch squares. Spread each square with 1 teaspoon apricot mixture, leaving edges of dough uncovered.
MOISTEN one corner of dough with water. Beginning at opposite corner, roll towards moistened corner; press lightly to seal.
BAKE 10 to 12 minutes or until edges begin to brown. Cool on wire rack. Sprinkle with powdered sugar.