What is caster/castor sugar?
I've got a Meringue recipe that calls for castor sugar.
Is that different than powdered sugar?
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Castor (caster) sugar is known as superfine, or bar sugar in the US. It's not the same as powdered sugar which is even finer, has been mechanically pulverized, and is often mixed with starch to prevent clumping.
According to Ochef you can make it with regular granulated sugar in your food processor for two minutes, but let the sugar dust settle before opening.
See Also:
Translating cooking terms between US / UK / AU / CA
Hobodave has answered this well - as an English person I can answer very simply. Caster sugar (UK spelling!) is, as Hobodave says, known as superfine sugar in the US. Powdered sugar is known as icing sugar in the UK.
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