preheat oven to 350

beat 1/2 cups sugar,butter,vanilla and cream cheese at medium speed of a mixer until well blended ( about 4 minutes). add eggs, 1 at a time, beating well after each addition. combine flour,baking powder, and salt. Add flour mixture to creamed mixture,beating at low speed until blended.

combine 1/4 cup sugar and cinnamon. combine 2 tbsp. of cinnamon mixture and apple in a bowl, and stir apple mixture into batter. Pour batter into 8 inch spring form pan coated with cooking spray, and sprinkle with remaining cinnamon mixture.

Bake at 350 for about 1 hour and 15 minutes or until the cake pulls away from the sides of the pan. Cool the cake completely on a wire rack, and cut with a serrated knife.

note: you can also make this cake in a 9 inch square pan or a 9 inch spring form pan; just reduce cook time by 5 minutes