Preheat oven to 350 degrees F (175 degrees C). Grease and flour a 10 inch Bundt pan. In a blender, puree peaches with juice, schnapps, white sugar and orange juice until smooth.
In a medium bowl, mix together the cake mix, pudding mix, eggs, oil and 1 1/2 cups of the peach mixture.
Pour batter into prepared pan. Bake in the preheated oven for 50 minutes, or until a toothpick inserted into the center of the cake comes out clean. Frost cake while still hot.
To make the frosting: Mix together the confectioners' sugar, margarine and remaining 1/4 cup of the peach mixture. Pour over hot cake.
