Preheat oven to 325°F Spray two nine inch round cake pans with nonstick baking spray.
Beat together butter and icing sugar at med-high speed until smooth.
In a medium bowl, sift together flour, baking powder and cinnamon. Add to butter mixture, and mix at low speed until combined and smooth.
Beat eggs and put into medium bowl. Add grated apple: fold in butter mixture.
Divide batter between prepared cake pans and bake for 40 minutes, or until a wooden toothpick inserted near center comes out clean.
Cool cakes in pans for 15 minutes. Transfer cakes to wire racks to cool completely.
Mix together butter, icing sugar and vanilla at medium speed. If using cream cheese, add at this time as well.
Reduce mixer speed to low and add cream, 1 Tbsp at a time until a creamy, spreadable consistency is reached.
To assemble cake, place one cake layer on a pretty cake plate and spread half of the Vanilla icing over top; top with second cak elayer and spread remaining icing over top. Garnish with chopped walnuts and dried cranberries.