Cake: Preheat oven to 350 degrees. Grease and flour a 9 x 13-inch baking pan; set aside.
In a large bowl, sift together flour, baking soda, baking powder, salt, cinnamon and nutmeg; set aside. In another bowl, mix baby food carrots and pineapple; set aside.
In large mixing bowl, blend sugar and oil. Add eggs, one at a time, beating well after each addition. Add dry ingredients alternately with carrot-pineapple mixture; mix well. Stir in the nuts, if desired.
Pour batter into prepared pan. Bake 40-45 minutes. Cool and top with Cream Cheese Frosting.
Frosting: Cream together butter, cream cheese and vanilla. Gradually add confectioners sugar. Beat thoroughly. Add a few drops of milk if frosting seems too thick.