Place paper liners in 24 muffin cups.
Beat butter at medium speed with an electric mixer until creamy. Gradually add 1 cup sugar, beating until light and fluffy. Add eggs, one at a time, beating just until yellow disappears after each addition. Combine milk and vanilla. Whisk together flour and next 4 ingredients; add to butter mixture, alternately with milk mixture, beginning and ending with flour mixture. Spoon batter into prepared muffin cups.
Bake at 350° for 15 to 16 minutes or until cakes spring back when lightly touched. Cool cakes in pans 10 minutes. Remove paper liners, and invert cakes onto a wire rack. Let cool completely.
Combine peaches and 2 tablespoons sugar, stirring gently. Beat whipping cream until frothy, add powdered sugar, and beat until soft peaks form. Serve cakes with peaches and whipped cream.
Substitute 2 teaspoons regular fresh thyme leaves and 1/2 teaspoon lemon zest for the lemon thyme, if desired.