In nonstick skillet, lightly toast walnuts over medium heat, shaking skillet frequently, until nuts are fragrant, about 2 minutes. Set aside to cool.

Transfer walnuts to food processor, and add 1/4 cup granulated sugar. Process until finely ground. In large bowl, with mixer on high, beat butter and remaining granulated sugar until fluffy, about 3 minutes. Gradually add flour, sour cream, vanilla, salt, and walnut mixture until well combined. Divide dough in half. Shape each half into disk. Cover with plastic wrap, and refrigerate 1 hour.

Heat oven to 350 degrees F. Flour hands lightly. Working with half of dough at a time, shape heaping teaspoonfuls into crescents. Place crescents on baking sheet, 2 inches apart. Bake 18 minutes, or until lightly browned. Cool on baking sheet 3 minutes. While cookies are slightly warm, dredge in confectioners' sugar to coat. Cool completely on wire rack. Repeat with remaining dough and sugar. Store cookies in airtight container.