Line 9-inch square pan with foil, extending foil over sides of pan. In large saucepan, melt vanilla chips over low heat, stirring constantly until smooth. Add frosting; cook and stir until thoroughly heated and smooth.
Spread 3/4 cup mixture evenly in bottom of foil-lined pan. Arrange marshmallows over mixture in pan in 6 rows of 6 marshmallows each. Pour remaining mixture evenly over marshmallows. Immediately sprinkle with candy bits from frosting. Refrigerate about 1 hour or until firm.
Remove candy from pan by lifting foil. Cut into squares between marshmallows.