In a large microwave-safe bowl, heat chocolate chips and peanut butter, uncovered on high for 1 minute. Stir. Microwave 30 to 45 seconds longer or until chips are melted; stir until smooth. Stir in cereal until evenly coated. Pat half of the mixture into a greased 13x9x2-inch dish.
In a microwave-safe bowl, heat peanut butter chips and butter, uncovered on high for 1 minute. Stir. Microwave 10 to 20 seconds longer or until chips are melted; stir until smooth.
Stir in water, vanilla and confectioners' sugar until smooth. Carefully spread over the cereal layer.
Carefully press remaining cereal mixture over peanut butter layer. Cover and chill for at least 1 hour. Cut into squares. Yields 3 dozen.