Line 13x9-inch baking pan with aluminum foil, extending foil over edges. Lightly spray with no-stick cooking spray; set aside.
Combine butter and marshmallows in 4-quart saucepan. Cook over medium heat, stirring constantly, 6-8 minutes or until marshmallows are melted and mixture is smooth. Remove from heat. Add cereal; stir to coat. Place mixture into prepared pan; press mixture evenly into pan with buttered hands. Cool completely.
Place candy coating into 2-quart saucepan. Cook over low heat, stirring occasionally, until melted and smooth. Remove from heat.
Lift bars from pan, using ends of foil. Trim bar edges to form 12x8-inch rectangle. Cut bars into 24 (2-inch) squares. Cut 12 squares diagonally, making 2 triangles each. Firmly press together, longest-side down, to form roof.
Creating 1 house at a time, dip top of 1 cereal square into melted candy coating; shake off excess. Place onto waxed paper. Press roof into candy coating to create house. Spoon additional candy coating over peaks of roof to frost. Decorate with coconut, decorator sugars and/or decorator candies. Let stand 1 hour or until coating is set.
Serve cottages the day you make them or store wrapped individually in aluminum foil for up to 1 day.
Variation: Chocolate Cottages: Use chocolate-flavored crisp rice cereal for chocolate cottages.