Mix flour and baking powder; set aside. Beat butter in large bowl with electric mixer on medium speed until creamy. Gradually add sugar and 1 package of the dry gelatin, beating until light and fluffy.
Add egg and vanilla; mix well. Gradually add flour mixture, beating until well blended after each addition.
Shape dough into 1-inch balls.
Place, 2 inches apart, on ungreased baking sheets. Flatten with bottom of clean glass.
Sprinkle with remaining dry gelatin.
Bake 8 to 10 minutes or until edges are lightly browned.
Remove from baking sheets to wire racks. Cool completely. Store in tightly covered container at room temperature.