In a small bowl, combine cold water and unflavored gelatin. Allow it to bloom for about 5 minutes.

In a medium saucepan, gently mix together eggnog, heavy cream, granulated sugar, and vanilla extract. Heat this mixture over medium-low heat until warm, just enough to dissolve the sugar without boiling.

Remove saucepan from heat and stir in the bloomed gelatin. Ensure it dissolves completely.

Pour the mixture into serving cups or molds. Cover and refrigerate for a minimum of 4 hours or until set.

In a separate bowl, whip the heavy cream, powdered sugar, ground nutmeg, and a bit of vanilla until soft peaks form. Chill until ready to serve.

For served panna cotta cups, run a knife around the edges, dip in warm water briefly, and invert onto plates. Top each with whipped cream and a sprinkle of nutmeg.