Preheat oven to 350°F Butter 13x9x2-inch baking dish. Melt 2 tablespoons butter in large skillet over medium heat. Add leeks; saute until tender, about 10 minutes. Transfer to large bowl.
Blend cream cheese, salt, pepper and nutmeg in processor. Add milk and eggs. Process just until blended. Transfer to bowl with leeks. Add potatoes and Gruyère. Stir to blend. Transfer mixture to prepared baking dish.
Bake potatoes until cooked through and top is brown, about 1 hour. (Can be prepared 1 day ahead. Cool slightly. Cover and refrigerate. Rewarm, covered, in 350°F oven, about 25 minutes.).