Preheat oven to 350°F. Butter and flour 13x9x2-inch metal baking pan. Using electric mixer, beat sugar, butter, eggs, and vanilla extract in large bowl until smooth. Add flour, cinnamon, baking soda, baking powder, and salt and beat just until blended. Stir in apples, then walnuts. Transfer batter to prepared pan.
Bake cake until top browns and tester inserted into center comes out clean, about 55 minutes. Cool in pan.
Cut cake into squares and serve with warm caramel sauce.