When you add in the flour, powdered sugar and vanilla the dough seems as though it will never get mixed. Just keep mixing with a spoon and after a [little] while it will be the perfect consistency to roll into balls. If the peaches in the filling are too big just cut them into smaller pieces so they fit into the indentation of the cookies.
Butter and margarine are not the same things. Butter comes either salted or unsalted and is called butter. (I used unsalted). Popular brands of margarine are Blue Bonnet or Imperial, and is usually called vegetable oil spread. Make sure you use 1 stick of each or they probably won't turn out right.
As you can see in the photos these cookies are very light.