In a large resealable plastic bag, combine the first six ingredients. Add chicken in batches; toss to coat. In a large skillet, saute the chicken, red pepper and onion in oil for 6-8 minutes until chicken juices run clear and vegetables are crisp-tender.
Meanwhile, cook fettuccine according to package directions. In a saucepan, combine the milk, cream cheese and Parmesan cheese; cook and stir over medium heat for 5 minutes or until cheese is melted and sauce is smooth. Drain fettuccine; top with chicken mixture and sauce. Sprinkle with toasted walnuts.