Preheat oven to 300 degrees F. In a medium size pot over medium heat, combine the sugar and water and dissolve. Add the peanuts and continue cooking, stirring frequently until peanuts are completely sugar coated and the sugar is crystallized and there is no syrup left. Pour mixture onto an ungreased cookie sheet, spreading and separating the peanuts as much as possible. Bake until the peanuts are golden, about 12 to 15 minutes, stirring at 5 minute intervals.
Recipe courtesy of Paula Deen