heat oven to 350 degrees. In small skillet over medium heat, melt 2 Tbsp of butter and add pecans. Cook until toasted, about 4 minutes. Set aside to cool.
In large bowl, cream together sugar and 1 cup of butter until light and fluffy. Beat in eggs and vanilla.
Combine flour, baking powser and salt. Add to creamed mixture alternatively with the milk. Beat just until combined. Fold in 2 cups of the toasted pecans. (Reserve 2/3 cup for garnishing.)
Spread eveningly into three greased and floured (I used baking spray) 9" round baking pans. Bake at 350 for 25-30 minutes or until a tootpick inserted near the center comes out clear. Cool for 10 minutes in the pan then remove from pans to cool completely on wire rack.
To make frosting, in large bowl, beat the cream cheese, butter, sugar and vanilla until smooth. Beat in enough milk to achieve spreading consistency. Spread frosting between layers and over top and sides of the cake. Sprinkle with remaining pecans. Store in refrigerator.