This one's for Pickles. I don't get credit for it, because I received it from a fellow so many years ago that I can't remember his name. I've done a bit of tweaking to the recipe. The original recipe called for 8 oz. of evaporated milk, but I didn't like wasting the extra 4 oz. and the extra milk makes it more spreadable. Also, the original called for garlic salt; which I changed to garlic powder. I don't need the extra sodium (as if there probably isn't more than enough in the cheese, milk, and liquid smoke), and I love garlic, so going with the powder just seemed natural. For a stronger smoke flavor, just up the liquid smoke to suit your taste. You can melt the cheese in the microwave, but I've found that a double boiler provides more even and consistent melting.
I almost always make a double batch. Velveeta comes in 2 lb. packages, and friends and family seem to smell it from miles away long before I even have it poured into the tubs, so the double batch just makes sense. For special gifts I purchase and sterilize the original (sometimes antique) cheese crocks, but my containers of choice are the Glad disposable/reusable 8 oz. tubs. Each batch will fill 4 or 5 of these. Also, people can return the containers to you (usually hoping to get it back refilled), but they are cheap enough that they don't have to worry about returning the container.
Smoky Pot Cheese Spread
1 lb. Pasteurized Cheese Spread (Velveeta, or Kroger's Nice ‘n Cheesy)
1/2 lb. Wisconsin or New York Sharp Cheddar Cheese
1 12 oz. can evaporated milk
1 tbsp. Liquid Smoke Flavoring
1/2 tsp. Garlic Powder
Cut cheese into small cubes. In the top of a double boiler, mix evaporated milk, liquid smoke, and garlic salt. Add cheese and heat to melt. Stir until smooth - the harder, sharp cheddar cheese melts slower, so heat and stir until lumps melt and mix. Pour melted cheese into crocks or serving dish. Allow to cool, then refrigerate. Note: When I received this recipe, it called for 8 oz. of evaporated milk. I have found that using the full 12 oz. can makes this smoother and easier to spread.