1. In medium-size bowl, whisk together flour, salt and baking powder. In large bowl, beat together butter, sugar and eggs until fluffy and smooth, 2 minutes. Beat in vanilla. On low speed, beat in flour mixture until dough forms. Divide dough in half; shape each half into disk. Wrap in plastic; chill 30 minutes.
2. Set oven rack in bottom third of oven. Heat oven to 375 degrees F. Line baking sheets with nonstick foil or regular foil coated with nonstick cooking spray.
3. In processor, pulse candies until very finely ground, or crush in doubled plastic food-storage bags with bottom of heavy skillet.
4. Roll out half of dough to 3/8-inch thickness. Use the following scalloped cutters: 1 3/4-inch rounds and squares, 2-inch squares and rounds, 3-inch rounds and 3-1/4-inch rounds. (You may use a fluted pastry cutter to make squares.) Cut out cookies; reroll scraps. Cut out centers with smaller cutters: 1-inch opening for 1 3/4-inch and 2-inch cookies; 1-1/2-inch opening for 3-inch cookies; and 1-3/4-inch opening for 3-1/4-inch cookies.
5. Transfer cookies to prepared baking sheets. Fill centers of cookies with ground candies to level of cookies. Sprinkle dough with decorator sugar; brush off any excess.
6. Bake in 375 degree F oven until candies in the panes are melted and cookies are lightly colored around edges, 10 to 13 minutes. Transfer baking sheet with cookies to wire rack; let cool completely.
7. Repeat rolling and cutting out cookies with the second half of the dough as in steps 4 and 5. Bake as in step 6.
8. Store in an airtight container at room temperature for up to 1 week. Cookie cutters: Sweet Celebrations Inc. 1-800-328-6722 or visit www.sweetc.com. Makes 6 dozen.