Prepare the ½ cup sugar and ¼ cup water as above (unless you made enough when you made the cake). Cool.
Melt margerine in heavy sauce-pan. Remove from heat and stir in the salt and flour. Stir in the caramelized water mixture slowly and return to heat. Boil 1 minute -- it may curdle, but this is o.k. Remove from heat and cool slightly. Beat powdered sugar and water alternately until it is the consistency to spread. Add vanilla. Ice.
I used to bake and take Dad one every year for his birthday -- the last one was September 28, 1965, and it fell a little in the center, but he thought it was the best ever.