1 Preheat oven to 350 degrees F (175 degrees C). Grease and flour three 8 or 9 inch round cake pans. Stir together 3 cups flour, white sugar, and soda. Set aside.
2 Combine 1 1/2 cup butter and water in a medium saucepan. Bring to a boil over medium heat, stirring occasionally. Remove from heat, and add 4 ounces white chocolate. Stir until chocolate melts. Stir in buttermilk, eggs, and 1 1/2 teaspoons vanilla. Gradually stir in flour mixture; batter will be thin. Dredge pecans in 1/2 cup flour, and fold into batter. Pour into prepared pans.
3 Bake for 20 to 25 minute. Cool layers in pans for 10 minutes. Remove from pans, and cool completely on wire racks.
4 To make the frosting: Beat together both packages of cream cheese and 1/3 cup butter until creamy. Blend in melted and cooled white chocolate. Mix in confectioner’s sugar and 1 1/2 teaspoons vanilla. Frost between layers, and on top and sides of cake. Sprinkle with additional pecans if desired.