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In a large heavy saucepan, combine the sugar and water. Stir gently to moisten all the sugar. Cook over medium-low heat until the sugar is dissolved. Editor's Tip: Don't stir again after the sugar is moistened. Instead, lightly swirl the pan from time to time to help the sugar melt evenly.
Continue to cook until the syrup turns a medium amber color, six to eight minutes. Reduce the heat to low, and cook until the sugar reaches 360°F, about five minutes longer. Editor's Tip: The sugar starts to melt at 320° and becomes honey-colored around 340°, which is a good time to reduce the heat. Caramel sauce is finished at 360° when it smells nutty and develops an even, light brown color.
Immediately remove the pan from the heat and carefully stir in the heavy cream, salt and, if desired, vanilla. Editor's Tip: Stir the cream in slowly and steadily to ensure a smooth caramel. When the cream is added, the mixture will bubble up vigorously, so you may want to wear oven mitts to protect your arms from spitting sugar.