TOSS peaches with their juices, the blueberries and 1 tsp. of the cinnamon in 8-inch microwaveable dish. Microwave on HIGH 3 min. Stir in tapioca. Microwave an additional 4 min., stirring after 2 min. Let stand 5 min.
MEANWHILE, mix cereal, walnuts, sugar and the remaining 1 tsp. cinnamon until well blended.
SPOON fruit mixture evenly into four dessert dishes; sprinkle with cereal mixture.