In saucepan, melt butter over medium heat; stir in marshmallows until smooth. Stir in vanilla. Scrape into large bowl; stir in cereal until coated. Set bowl over saucepan of boiling water. Using rubber gloves, shape cereal mixture into 4-inch long ghost shapes. Let stand for about 30 minutes or until firm.
To make icing, in top of double boiler over boiling water, combine sugar, water, egg white, cream of tartar and salt. With electric mixer, beat at high speed for 7 minutes or until stiff glossy peaks form. Fold in vanilla.
Spread ghosts with Pallor Icing ; let stand for about 30 minutes or until set. In top of double boiler over hot (not boiling) water, melt chocolate; pipe onto ghosts to make faces. Ghosts can be refrigerated in airtight container for up to 3 days. Cover and refrigerate for 1 hour or until thickened. Decorate the ghosts by drawing faces with chocolate, or use candies and licorice strings.