Let butter and eggs stand at room temperature for 30 minutes. Meanwhile, grease and flour a 10-inch fluted tube pan; set aside. In a medium bowl stir together flour, baking powder, and salt; set aside.
Preheat oven to 325 degrees F. In a large mixing bowl beat butter with an electric mixer on medium to high speed for 30 seconds. Gradually add sugar, 2 tablespoons at a time, beating on medium speed about 5 minutes or until very light and fluffy. Beat in vanilla. Add eggs, one at a time, beating on low to medium speed for 1 minute after each addition and scraping sides of bowl frequently. Gradually add flour mixture, beating on low speed just until combined. Stir in milk chocolate. Spoon batter into the prepared pan, spreading evenly.
Bake for 70 to 75 minutes or until a wooden toothpick inserted near the center comes out clean. Cool in pan on a wire rack for 15 minutes. Remove cake from pan. Cool completely on wire rack. Spoon Milk Chocolate Ganache over cooled cake.
Milk Chocolate Ganache
In a medium saucepan bring whipping cream just to boiling over medium-high heat. Remove from heat. Add milk chocolate (do not stir). Let stand for 5 minutes. Stir until smooth. Let cool for 15 minutes.