Prepare cake according to package directions; stir carrots, pineapple, walnuts and coconut into batter. Bake according to two 9-inch round cake pan directions. Cool completely.
In large mixing bowl, combine cream cheese, butter and vanilla; using an electric mixer on medium speed, beat until light and fluffy. Gradually mix in powdered sugar. Mix in milk 1 tablespoon at a time to reach desired consistency.
Place one cake layer top-side-down on serving platter; spread top with frosting. Top with second cake top-side-up. Frost entire cake with remaining frosting.