Grease and lightly flour three 8x1-1/2-inch or 9x1-1/2-inch round baking pans. Set aside.
In a medium bowl, sift together flour, baking powder, and salt; set aside.
In a large bowl, beat butter with an electric mixer for 30 seconds. Add 1 cup sugar and the vanilla; beat until fluffy. Add the flour mixture alternately with half-and-half to creamed mixture, beating on low to medium speed after each addition just until combined.
Clean beaters. In another large bowl, beat egg whites on medium to high speed until soft peaks form (tips curl). Gradually add 1 cup sugar and beat on high speed until stiff peaks form (tips stand straight). Gently fold the egg whites, about 1/4 at a time, into creamed mixture. (If necessary, transfer mixture into a larger bowl.).
Divide mixture into prepared pans. Bake in a 350 degree F oven about 30 minutes for 8-inch rounds and about 25 minutes for 9-inch rounds or until a toothpick inserted near centers comes out clean*. Cool layers in pans on wire racks for 10 minutes. Remove the layers from the pans and completely cool on wire racks.
Frosting: In a heavy saucepan, melt 18 ounces chopped white chocolate baking squares or bars over low heat. Cool until slightly warm. In a large bowl, beat one softened 3-ounce package cream cheese with an electric mixer until smooth. Cut 1-1/2 cups butter into pieces. Add to cream cheese; beat until fluffy. Gradually add cooled chocolate, beating until well blended.
Frost. Cover and refrigerate. Let stand at room temperature for 30 minutes before serving. Makes 16 servings.