In a saucepan, combine the peaches, ½ cup of the sugar, and the water. Bring to a boil, then simmer for 10 minutes. Remove from heat and set aside.
Preheat the oven to 350°F. Add the butter to a 1.5-quart baking dish. Place the dish in the oven while it preheats to melt the butter.
In a bowl, whisk together the remaining sugar, flour, and salt. Whisk in the vanilla and milk until smooth.
When the oven is preheated and the butter has melted, pour the batter over the butter in the pan. DO NOT STIR. Spoon the peaches on top, then gently pour any remaining syrup over the top. Again, do not stir.
If desired, sprinkle the top with cinnamon or pumpkin pie spice.
Bake for 30-35 minutes, or until golden, bubbly, and the top springs back when pressed lightly. Let cool slightly before serving.
