Heat oven to 350 degree F. Line two standard cupcake pans with 20 foil or paper liners.
In medium-size bowl, whisk flour, baking powder and salt. Set aside.
In large bowl, with an electric mixer, beat together peanut butter and butter until smooth. Add sugar gradually; beat until thoroughly combined, and mixture is a light tan color, about 3 minutes. Add eggs, one at a time, beating well after each addition, about 2 minutes total.
Add the flour mixture, alternating with the milk, beginning and ending with flour mixture. Stir in vanilla extract. Divide batter evenly among prepared cups, about a heaping 1/4-cupful for each.
Bake at 350 degree F for 25 to 27 minutes, or until lightly browned on tops. Remove from pan and cool completely on a wire rack.
In a medium-size bowl, beat peanut butter and butter until smooth. Add half of the confectioners sugar, alternating with milk. Beat until smooth and no lumps remain (you may wish to sift in the sugar). Spread over cupcakes, swirling decoratively. Garnish with chopped, dry-roasted peanuts. Makes 20 cupcakes.