1. Preheat oven to 350°F. Butter 1 1/2-quart casserole. Spread one side of each slice bread with butter. Layer bread slices, buttered sides up, in casserole; sprinkle with cinnamon. Beat eggs slightly in medium bowl; mix in granulated sugar, vanilla and salt. Stir in milk; pour over bread.
2. Place casserole in pan of very hot water (1 inch deep). Cover casserole loosely with aluminum foil. Bake 20 minutes; remove foil. Continue baking 35 to 40 minutes longer or until knife inserted 1 inch from edge of casserole comes out clean. (Cover with foil if top gets too brown.)
3. Remove casserole from hot water. Sprinkle with powdered sugar. Serve warm. Store covered in refrigerator.