Milk Chocolate Caramel Sauce

1/2 c sugar
3/4 c heavy cream
6 oz fine-quality milk chocolate, chopped (Gourmet recommends Lindt Excellence, and I agree; it was phenomenal)
rounded 1/8 tsp salt
1/2 tsp vanilla

Cook sugar in a dry 1 1/2 to 2 quart heavy saucepan over moderately low heat, undisturbed, until it begins to melt, then cook, stirring slowly with a fork until melted and pale golden. Continue to cook, swirling pan, until sugar is a deep golden caramel.
Remove from heat and carefully pour cream down side of pan (mixture will bubble and steam vigorously). Simmer, stirring, until caramel is dissolved.
Add chocolate and salt and cook over low heat, whisking, until sauce is smooth.
Whisk in vanilla.
Cool to warm or room temperature.

Source: Gourmet, February 2007