1Combine sugar, butter, cream cheese and vanilla. Beat at medium speed for about 1 minute, scraping sides of bowl often, until well mixed.
2Reduce to low speed and add flour and salt. Make sure it is blended well, and then divide dough into four equal sections. Wrap each section individually with plastic wrap and refrigerate at least 2 hours, until firm.
3Heat oven to 375* On lightly floured surface, roll out dough one section at a time, keeping other sections refrigerated, to 1/8" thickness. Cut out with 2-inch round cookie cutter. Place 1 inch apart on cookie sheets. Spoon 1/4 teaspoon of jam onto center of unbaked circle. With thin spatula, fold cookie over to form bell or lily shape and gently press narrow end to seal. The jam will show at the top and the cookie will be cone-shaped. Repeat with remaining dough and jam.
4Bake for 7-11 minutes or until edges are very lightly browned. Cool completely and sprinkle with powdered sugar.
5This recipe is delicious with peach or apricot jam too, although not very Christmasy! Enjoy.