Dissolve gelatin in boiling water. Add cold water and extract, if using. (If using canned peaches, drain syrup into measuring cup and add cold water to make 1 cup.) Chill in bowl until slightly thickened, about 1½ hours.
Pour 1/3 cup gelatin into mold. Refrigerate 10 minutes.
Blend 3/4 c gelatin with 1½ c Cool Whip. Pour into mold and smooth out top. Refrigerate 10 minutes.
Mix remaining gelatin with peaches. Carefully spoon into mold. Refrigerate 4 hours or overnight, until fully set.
Dip mold into hot water 20-30 seconds; invert onto plate. Garnish with remaining topping.
Other flavor combinations could include: black cherry gelatin with sliced bananas, strawberry gelatin with sliced strawberries, lime gelatin with melon balls.