In a medium mixing bowl beat butter and shortening with an electric mixer on medium to high speed for 30 seconds. Add sugar, baking powder, and salt; beat until combined, scraping sides of bowl occasionally. Beat in egg and 1 teaspoon vanilla until combined. Beat in as much of the flour as you can with the mixer. Using a wooden spoon, stir in any remaining flour. Divide the dough in half. Cover and chill dough about 1 hour or until dough is easy to handle.
On a lightly floured surface, roll half of the dough at a time to 1/8-inch thickness. Using a variety of 2-1/2-inch Christmas cookie cutters, cut out dough. Place cutouts on an ungreased cookie sheet.
Bake in a 375 degree F oven for 7 to 8 minutes or until edges are firm and bottoms are very lightly browned. Immediately after baking, use a drinking straw to make a hole in top of each cookie. Transfer cookies to a wire rack; cool.
In a large mixing bowl combine meringue powder, water, powdered sugar, 1 teaspoon vanilla, and cream of tartar. Beat with an electric mixer on high speed for 7 to 10 minutes or until very stiff. Thin it with a little water just until it appears smooth when spread. (When not using icing, keep bowl covered with plastic wrap to prevent icing from drying out.)
Divide icing and tint desired colors with paste food coloring. Place some of each color in a decorating bag (no couplers or tips are needed). Spread a base of white or colored icing over tops of cookies. (If desired, use an artist's paintbrush to apply the icing base.) Let icing base dry for 1 to 2 hours or until completely dry. Snip tips off decorating bags and pipe colored icing onto cookies. If desired, sprinkle colored sugar onto wet icing or press silver or gold decorative candies into icing. (Do not use gold and silver candies on cookies that will be eaten.) Let cookies dry 1 to 2 hours.
Carefully thread ribbons through holes in cookies and hang them on an ornament tree or on a natural branch as in the photo. If desired, store decorated cookies in the freezer, in an airtight container, and take out one cookie each day during Advent to hang on the tree or branch. Makes 48 cookies.