Whip cream until stiff peaks form, mix in ¼ cup sugar and vanilla extract; set aside.
In a food processor fitted with blade, place cranberries and pulse until in small chunks. Add 2 tablespoons sugar and pulse 2 more times to combine.
Fold cranberries, walnuts and marshmallows into whipped cream. Taste and add more sugar to taste if desired. Chill until serving time.