Add the first 7 ingredients to a 1-1/2- or 2-pound bread machine according to the manufacturer's directions. Select the dough cycle. When cycle is complete, remove dough. Punch down. Cover and let rest for 10 minutes.
On lightly floured surface, roll dough into an 18x12-inch rectangle. Spread with the 2 tablespoons margarine. Mix 1/4 cup sugar and cinnamon; sprinkle over dough. Sprinkle with cherries. Starting from a long side, roll into a spiral; seal. Place seam up. Fold half of the roll over the top of other half; seal ends. Place on greased large baking sheet. Starting 3/4 inch from sealed end, cut down the center through all dough layers, cutting through the folded end. Turn cut sides out so they face up and touch each other, forming a heart. Cover; let rise in warm place 30 minutes or until nearly double.
Bake in a 350 degree F oven for 20 to 25 minutes or until bread sounds hollow when tapped. Remove from baking sheet; cool slightly on a wire rack.
In a small bowl combine powdered sugar and vanilla. Stir in enough milk (1 to 2 tablespoons) to make an icing of drizzling consistency. Drizzle over bread.