Combine gelatin and 1/2 cup cold water in the bowl of an electric mixer with whisk attachment. Let stand 30 minutes. Meanwhile, thickly coat the bottom of a 9x13 inch glass baking pan with 1 cup of sifted powdered sugar. Attach a candy thermometer to a heavy bottomed sauce pan. Place the candy thermometer at least 1/2 inch off the bottom of the pan.
In the saucepan, combine granulated sugar, corn syrup, salt, and 1/2 cup water. Place over low heat, and stir until sugar has dissolved. With a heat resistant brush dipped in warm water, wash down sides of pan to dissolve any sugar crystals. Cook syrup without stirring until it reaches 244 F (firm-ball stage). Immediately remove pan from heat.
With mixer on low speed, slowly and carefully pour syrup into the softened gelatin. Slowly, increase speed to high and beat until mixture is very thick and white and has almost tripled in volume, about 15 minutes. Add vanilla; beat to incorporate.
Pour marshmallow mixture into pan and quickly smooth the top. Dust top with powdered sugar and let stand to cool and dry. Once cool and dry, turn out onto a cutting board. Cut marshmallows with a dry hot knife into squares, and dust with more confectioners' sugar.