1 1/2 cups granulated sugar, divided
1/2 cup boiling water
2 eggs, separated
1/2 cup butter or margarine, softened
1 teaspoon vanilla extract
2 1/4 cups all-purpose flour
3 teaspoons baking powder
1 teaspoon salt
1 cup milk
Heat 1/2 cup of the sugar in a heavy 8-inch skillet, stirring constantly, until sugar is melted and golden brown. Remove from heat; stir in boiling water slowly. Cook over low heat, stirring constantly, until sugar lumps are dissolved. Add enough water to syrup, if necessary, to measure 1/2 cup; cool.
Preheat oven to 375 degrees F. Grease and flour two 9-inch or three 8-inch round layer pans.
Beat egg whites in small mixer bowl until foamy. Beat in 1/2 cup of the sugar, 1 tablespoon at a time; continue beating until stiff and glossy. Reserve meringue.
Beat butter, remaining 1/2 cup sugar, the egg yolks, and vanilla extract30 seconds on low speed in large mixer bowl, scraping bowl constantly. Beat 5 minutes on high speed, scraping bowl occasionally. Beat in syrup. Beat in flour, baking powder and salt alternately with milk. Fold in reserved meringue. Pour into pans. Bake until a wooden pick inserted in center comes out clean, 20 to 25 minutes. Cool 10 minutes.
Remove from pans. Cool completely on racks Fill layer(s) and frost with Caramel Frosting. Arrange pecan or walnut halves around top edge of cake if desired.
2 tablespoons butter or margarine
2/3 cup packed dark brown sugar
1/8 teaspoon salt
1/3 to 1/2 cup whipping cream or evaporated milk
2 1/3 to 2 1/2 cups confectioners