Preheat oven to 350°F. Beat butter in large bowl with electric mixer on medium speed until light and fluffy. Add 1/2 cup of the sugar, vanilla, nutmeg and salt; beat until well blended. Stir in flour and pecans.
Shape into 1-inch balls. Place 1 inch apart on ungreased baking sheets.
Bake 15 minutes. Remove from baking sheets. Immediately roll hot cookies in remaining 2 cups sugar. Place sugared cookies on wire racks to cool. When cool, roll again in sugar.