Line bottom of two 8- inch round cake pans with parchment paper or waxed paper; grease and flour pans.
Combine flour, baking powder, cinnamon, baking soda, salt and nutmeg in medium size bowl; set aside.
Mix sugars together in large bowl, breaking up any lumps.
Whisk in eggs, then oil, until blended. Stir in sauerkraut, apple and nuts. Add flour mixture and stir just until moistened. Spoon cake mix into prepared cake pans.
Bake about 28 to 35 minutes, or until wooden pick inserted in center comes out clean and cake begins to pull away from sides of pan. Let cool 10 minutes, then invert cakes onto wire racks to cool completely.
Spread Cream Cheese Frosting on top of one cake. Top with second cake and frost top and sides.
Cream Cheese Frosting:
Whip cream cheese, slowly adding sugar, until fluffy. Add heavy cream, orange rind, cinnamon and vanilla. Blend until creamy.
Makes about 2 1/4 cups of frosting.