Allow butter, cream cheese, and eggs to stand at room temperature for 30 minutes. Meanwhile, grease and lightly flour a 10-inch tube pan. Combine flour, baking powder, and salt. Set aside.
In a large mixing bowl beat butter and cream cheese with an electric mixer on medium to high speed about 30 seconds or until softened. Gradually add sugar, 2 tablespoons at a time, beating on a medium speed about 5 minutes or until very light and fluffy. Add poppy seed and vanilla. Add eggs, one at a time, beating on low to medium speed 1 minute after each addition and scraping bowl frequently. Gradually add flour mixture, beating on low speed just until combined. Pour batter into prepared pan.
Bake in a 325 degree F oven about 1-1/4 hours or until a wooden toothpick inserted in center comes out clean. Cool in pan on wire rack 15 minutes. Remove from pan. Cool completely on wire rack. Drizzle Lemon Icing over cake. Makes 16 to 20 servings.
In a small mixing bowl stir together 1-1/2 cups sifted powdered sugar, 1/2 teaspoon finely shredded lemon peel, and 1 to 2 tablespoons lemon juice to make icing of a drizzling consistency.