In a large saucepan combine sugar, peach nectar, and orange juice; cook and stir over low heat until sugar is completely dissolved. Cool completely. Stir in the 6 cups peaches, milk, and schnapps.
Transfer mixture, 2 cups at a time, to a food processor bowl or blender container. Cover and process or blend until smooth. Transfer to a 13x9x2-inch baking pan. Cover and freeze for 4 to 6 hours until almost firm.
Break frozen mixture into small chunks. Transfer to a chilled bowl; beat with an electric mixture until smooth but not melted. Stir in the 1 cup chopped peaches, if desired. Cover; freeze 4 hours more or until firm. Makes 1-1/2 quarts.