Place pecans and 1/4 cup of butter in a baking pan. Bake at 350 for 20-25 minutes or until toasted, stirring frequently; set aside.

In a mixing bowl, cream sugar and remaining butter. Add eggs, one at a time, beating well after each addition. Combine flour, baking powder and salt; add to the creamed mixture alternately with milk. Stir in vanilla and 1 1/3 cups of toastted pecans.

Pour the batter into three greased and floured 9 inch round cake pans. Bake at 350 for 25-30 minutes. Cool the cakes for 10 minutes; remove from pans to cool on a wire rack.

For the frosting, cream butter and sugar in a mixing bowl. Add milk and vanilla; beat until smooth. Stir in the remaining toasted pecans. Spread frosting between layers and over top and sides of cake.