Here are some additional Peanut Butter Powder links:
Peanut Butter Powder Tips
Another Peanut Butter Powder Tip
Additional Peanut Butter Powder Recipes
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You're right, the recipe is a bit confusing. But I think you just add the powdered ingredients and the sugar directly to the water, add some ice and blend. That should do the trick.
I think the recipe could be made more clear if it stated "reconstituted" (product) rather than saying, for example, to use 1/2 C. of dehydrated milk. When I first read this recipe, I thought that I was supposed to just use 1/2 Cup of the powdered milk, peanut butter powder, etc.
Also, is there a way to just throw all of the powders in the blender with some water, rather than having to reconstitute first?
I love the idea of throwing some cocoa powder in there too. Mmmm!