1Preheat oven to 375, 15 minutes before baking, with the rack in the center of the oven.
2Butter an 8" square baking pan, preferably glass.
3Cut the peaches into 1/2" slices. Put in a pan with sugar, lemon juice, tapioca and nutmeg and toss gently. Cook over high heat until syrup begins to bubble, about 4 minutes. Set aside.
4FOR THE TOPPING: Work the flour into the sugar, butter and cinnamon until the butter is the size of small peas. This can be done with a food processor or pastry blender. Set aside.
5FOR THE CAKE: Stir the sour cream and baking soda together and let stand while you begin the cake. Spread the warm peaches and their juice in the bottom of the baking pan.
6Cream the egg, sugar and butter in the processor or with a mixer until it is light and fluffy. Add the vanilla and sour cream and mix well. Gently fold in the flour, baking powder and salt. In the processor, do this by pulsing the machine on and off several times.
7Spoon the batter over the peaches and spread in a thin, even layer with a rubber spatula. It's OK if the peaches are not completely covered. Sprinkle the topping over the batter. Bake until a toothpick inserted into the center of the cake, not the fruit, comes out clean, 25-28 minutes.