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1. Preheat the oven to 350. With a pastry brush, spread the softened butter over the bottom and sides of two 9-inch layer-cake pans. Add 1 tablespoon of all-purpose flour to each pan and tip it from side to side to distribute the flour evenly. Invert the pans and rap them sharply to remove the excess flour.
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2. Combine the cake flour, baking powder and salt, and sift them together into a bowl. Pour the grapefruit juice, vegetable oil and water into a glass measuring cup. Set aside.
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3. With a wire whisk or a rotary or electric beater, beat the egg whites and cream of tartar until the whites are stiff enough to stand in unwavering peaks on the beater when it is lifted from the bowl. Set aside.
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4. In a separate bowl but with the same beater, beat the egg yolks and granulated sugar together for 4 to 5 minutes, or until the mixture is thick. Beat in about ½ cup of the flour mixture and, when it is thoroughly incorporated, add about ¼ cup of the juice-and-oil mixture.
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5. Repeat three times, alternating ½ cup of the flour with ¼ cup of the juice and oil and beating the batter well after each addition. Stir in 1 tablespoon of grated grapefruit peel.
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6. With a rubber spatula scoop the egg whites over the batter and fold them together gently but thoroughly. Pour the batter into the prepared pans, dividing it evenly between them and smoothing the tops with the spatula.
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7. Bake the cakes in the middle of the oven for about 25 minutes, or until a toothpick or cake tester inserted in the centers comes out clean. Let the cakes cool in the pans for 4 or 5 minutes, then turn them out onto wire racks to cool to room temperature.
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8. Meanwhile, prepare the cream-cheese icing in the following fashion: Wash the grapefruit and pat it dry with paper towels. With a small sharp knife, remove the skin without cutting into the bitter white pith beneath it. Cut the peel into strips about 1/8 inch wide and set them aside.
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9. To section the grapefruit, cut the white outer pith and membrane away, using short sawing motions. Then cut along both sides of each membrane division to the core of the grapefruit. As each section is freed, carefully lift it out and set it aside on paper towels to drain.
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10. In a deep bowl, cream the cream cheese and confectioners' sugar together by beating and mashing them against the sides of the bowl with the back of a large spoon until the mixture is light and fluffy. Beat in the grated grapefruit peel and vanilla extract.
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11. When the cake is cool, place one layer upside down on an inverted cake pan. With a metal spatula, spread about ½ cup of the cream-cheese icing over this layer and put the top layer in place. Reserve ½ cup of the icing to make roses.
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12. Then spread the remaining icing evenly over the top and sides of the cake and decorate the sides with the reserved strips of grapefruit peel. Arrange the grapefruit sections and icing roses attractively on top and refrigerate the cake until ready to serve.
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