Preheat oven to 350 degrees F. In a one-quart baking dish or 9x13-inch square pan, cream together 2 cups sugar and 1 cup of room temperature butter. Mix in 2 cups flour and milk until smooth. Pour peaches over the top. Cut each slice of bread into five fingers, and lay the fingers over the peaches.
In a medium bowl, combine 1 1/2 cup sugar, 2 Tbsp. flour, eggs and 1/2 cup melted butter until well blended. Pour over bread and peaches.
Bake 30 to 45 minutes in the preheated oven, until golden brown.