Pudding: Heat the oven to 350 degrees. Grease an 11x8-inch (2-quart) baking dish with butter. In a large bowl, combine ¾ cup sour cream, sugar, 1 teaspoon vanilla, eggs, and 1 cup milk. Whisk until smooth.
Stir in the cranberries and bread cubes. Let the mixture stand for 15 minutes, stirring twice to soak the bread. Pour the mixture into the baking dish.
Bake for 30 to 35 minutes or until a knife inserted in center comes out clean.
Sauce: In a small bowl, combine ¼ cup sour cream, powdered sugar, ¼ cup milk, and ¼ teaspoon vanilla; beat with wire whisk. Spoon the sauce over servings of bread pudding. Serve warm or cool.