Beat egg yolks until thick and lemon colored. Add sugar, 2 T. at a time, beating a few minutes after each addition. Add vanilla. Sift flour with baking powder. Sprinkle flour into egg yolk mixture and blend in well. Beat whites stiff but not dry, then fold into batter. Lastly, fold in ground nuts. Grease and flour two (9x2") pans. Bake at 325° for 35-45 minutes.
Butter Icing for Hungarian Walnut Torte: Cream butter thoroughly. Add sugar and cream well. Add cocoa and cream until blended. Add flavoring.