Preheat oven to 350. In a medium bowl lightly combine the yolks, 1/4 cup of milk and vanilla. In a large mixing bowl combine the dry ingredients and mix on low speed for 30 seconds to blend. Add the butter and remaining 3/4 cup milk.
Mix on low speed until the dry ingredients are moistened. Increase to medium speed and beat 1 1/2 minutes to develop the cakes structure. Scrape down the sides. Gradually add the egg yolk mixture in 3 batches, beating for 20 seconds after each addition to blend well. Scrape down sides again.
Scrape the batter into two well greased and floured 9' round cake pans and smooth the surface with a spatula. The pans will be about 1/2 full. Bake 25 to 35 minutes or until cake tests done in center with a toothpick. Let cakes cool for 10 minutes after you remove from oven. Loosen sides with small spatula and invert onto greased wire racks. Let cool completely. At this stage cakes can be frozen for 2 months.
When cooled place one layer face down on platter and spread preserves evenly on top of layer only (if cake is not cooled you will have a mess) place 2nd layer face up on top of preserves. Cake is ready for frosting.
Frosting- Place the cream cheese, butter, powdered sugar and vanilla extract in mixer bowl fitted with paddle attachment. Beat on low speed just to combine the ingredients, then beat on high speed, stop to scrape down sides until very light, fluffy and smooth, about 7 minutes. Frost sides first then top of cake. Place fresh berry if you wish.