Preheat oven to 325 degrees. Wrap outside bottom and side of 9-inch springform pan with a double layer of heavy duty foil.
Crust: Combine graham cracker crumbs, butter, sugar and nuts in a medium bowl. Press crumb mixture onto bottom and 1 inch up the sides of the prepared pan.
Filling: Remove 2 T of the butterscotch chip to reserve for garnish. Heat remaining chips and condensed milk in a medium saucepan over low heat until chips are melted and mixture is smooth, remove from heat. Cool to room temperature.
Beat cream cheese, sugar, flour and vanill extract in a large mixing bowl until combined. Add butterscotch mixture, beat until smooth. Add eggs, beat until just combined.
Pour into prepared pan. Place pan in a large roasting pan, fill the roasting pan with warm water until halfway up the side of the springform pan.
Bake for 1 1/4 to 1 1/2 hours or until 2 1/2 inch area around the outside edge appears set when gently shaken.
Remove cheesecake from water. Pull foil away from pan and lift springform pan out of foil to wire rack. Cool on wire rack for 15 minutes. Run knife around edge of cheesecake, cover and refrigerate for 6 hour or overnight.
to serve; remove sides of the pan. Spread caramel topping over top of the cheescake. Pipe outer egde with whipped topping and garnish with reserved butterscotch chips.