1In large microwavable bowl, microwave butter and 3 cups of the marshmallows uncovered on High about 2 minutes, stirring after every minute, until smooth. Gently stir in cereal until thoroughly coated.
2Spray 1/2 cup measuring cup with cooking spray. Measure rounded 1/2 cupfuls cereal mixture onto waxed paper-lined cookie sheets. Shape into nest shapes.
3To make the birds, cut feet, beaks and wings out of the taffy candy. Adhere to each of the remaining 9 marshmallows with a small amount of the frosting. Cut tops off orange slice candies; use frosting to adhere on top of each marshmallow for crest. Place 2 miniature chocolate chips on front of each marshmallow with frosting for eyes. Place 1 marshmallow in each of the cereal nests.