Put the 1/4 cup (1/2 stick) of butter in a shallow baking pan with the chopped pecans and put the pan in the oven for 15- 20 minutes, stirring the pecans and melted butter every few minutes, until the fragrance is wonderfully toasty.
Watch carefully near the end to avoid burning.
Remove from pan and set aside.
Grease and flour three 8 or 9-inch round layer cake pans.
Prepare the cake: In the large bowl of an electric mixer, cream the 3/4 cup (1 1/2) sticks of butter.
Beat in the 2 cups of sugar, creaming well.
Beat in the eggs one at a time, beating well after each addition.
Sift together the flour, baking powder and salt.
Add the 2 teaspoons of vanilla to the milk.
Beat the flour mixture into the batter in thirds, alternating with the milk mixture.
Fold in 1 1/3 cups of the butter-toasted pecans into the cake batter.
Divide batter equally into the prepared pans.
Bake for about 25 minutes or until a toothpick inserted in the middle comes out clean.
Cool and remove from pans.
Prepare the frosting: Melt 1 1/2 tablespoons of the butter in a medium saucepan over low-medium heat and stir in the flour.
Stir until all of the flour has been moistened or at least colored a little by the butter.
Stir in the milk just a little at a time, stirring constantly and incorporating all the milk each time before adding more, working to incorporate all the flour and avoid lumps.
Continue until all the milk is in and the mixture is thickened and smooth.
Transfer to the small bowl of an electric mixer, and beat to remove any lumps you missed.
When the flour mixture is cool, beat in the teaspoon of vanilla, then the softened butter.
Add the 1 cup of sugar, and beat 2 minutes at medium speed, until the mixture is fluffy and no graininess from sugar remains.
Fold in the fat-free Cool Whip and the remaining 2/3 cup of butter-toasted pecans.