Preheat oven to 350 degrees F (175 degrees C). Grease and flour a 9x13 inch pan.
In a large bowl, beat 1 1/2 cups sugar and oil until smooth. Beat in eggs, 1 cup milk and 1 teaspoon vanilla. Beat in flour, baking powder and salt. Pour batter into prepared pan.
Bake in the preheated oven for 30 minutes, or until a toothpick inserted into the center of the cake comes out clean. Allow to cool. Frost with Chocolate Frosting.
To make the Chocolate Frosting: In a saucepan over medium heat, combine margarine, 1 cup sugar and 1/4 cup milk. bring to a full boil. Remove from heat and stir in chocolate chips, 1 teaspoon vanilla and marshmallows. Beat until smooth.
