Preheat your oven to 350°F, and put liners in cupcake tins.
Pick the marshmallows out of the box of Lucky Charms. Set aside the marshmallows to fold into the batter and frosting.
Combine 1 cup of the Lucky Charms (after removing the marshmallows), the milk and vanilla extract. Let soak while you finish assembling the other ingredients, about 15-20 minutes.
Grind 1 cup of the Lucky Charms (after removing the marshmallows) into a powder using a food processor, or just crushing them up really well. You should be left with a little less than half a cup of cereal powder.
Sift together the cereal powder, flour, baking powder, and salt into a bowl.
In a large bowl, cream the butter, then gradually add the sugar, creaming until light and fluffy.
Add the eggs one at a time, beating for a few seconds after each addition
Drain the milk mixture off of the cereal.
To the butter and sugar, alternate adding the flour mixture and the milk mixture in thirds, beating until smooth after each addition.
Fold 1 c of the reserved marshmallows into the batter.
Divide the batter evenly among the cupcake tins. Bake for 20-25 minutes, or until it springs back when you touch it.
Let cool before frosting.