Preheat the oven to 350 degrees F (175 degrees C). Grease and flour three 9-inch round layer pans.

In a large bowl, cream butter or margarine, 1 1/4 cups sugar, and 1 1/2 teaspoons vanilla together well. Beat until light and fluffy.

Stir flour, baking powder, and salt together in another bowl. Add flour mixture to butter mixture in 3 parts alternating with milk in 2 parts, beginning and ending with flour.

Using clean beaters, beat egg whites in a mixing bowl until soft peaks form. Add 1/2 cup sugar gradually while beating until stiff. Fold whipped egg whites into batter. Pour into prepared pans.

Bake for 25 to 30 minutes, until an inserted wooden pick comes out clean. Cool.

To make filling: Stir 2 cups Lady Baltimore Frosting, raisins, nuts, cherries, and 2 teaspoons vanilla or sherry together. Use as filling to spread between layers. Spread remaining frosting on top and sides of cake.