For the cupcakes:
Preheat oven to 350F degrees. Prepare cupcake pan with liners.
In a large bowl, cream together butter and sugar until very light and fluffy. In a separate bowl, sift flour, baking powder, and salt together. Alternate adding flour mixture and champagne into the creamed mixture.
In another large bowl, beat egg whites until stiff peaks form. Fold the egg whites in to the batter. Fill the cupcake liners about 2/3 full.
Bake for 20 minutes (do not over cook), or until a toothpick inserted into the cake comes out clean. Allow to cool.
Frosting: Beat butter until light and fluffy. Add sugar and vanilla. Add champagne slowly until proper consistency achieved.