Nuts, in pesto, serve the same two functions as the Parmesano: 1. flavor, and 2. as a thickening agent.
If you leave out the nuts you have to increase the cheese content. Not that that's a bad thing, by any means.
I do like nutmeg. But don't see the purpose of it in Mama's recipe. I would leave it out, myself, as she does.
Personally, I like the combo of basil and pine nuts. Friend Wife, on the other hand, doesn't care for pine nuts at all. So we've tried all sorts of variations.
The most common is parsley and walnuts. I'll pass on that one. I don't care for parlsey as the main ingredient of anything. And walnuts tend to turn bitter (their high oil content goes rancid). I would substitute pecans for the walnuts in this one. And if you try it, be sure and use the flat-leaf parsley, which has some flavor, as opposed to the curley leaf, which doesn't.
Recently I've seen, but haven't tried, a recipe for pesto using arugala and filberts. Sounds like a winner, especially for when a little bit of bite is wanted. And a good way of using up the arugala before the heat comes in.
A friend of mine makes pesto with fresh oregano. That's always seemed a bit much to me, but could be a nice change of pace for anyone preferring a slightly stronger herbal flavor.
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