Confectioners', powdered, or icing sugar is granulated sugar that has been 
beaten, crushed, trampled, stomped, trodden, squashed, and ground into a fine 
powder. Because it tends to form clumps, confectioners' sugar is augmented with 
about 3 percent cornstarch to keep it loose and flowing. 
Confectioners' sugar is ground to different degrees of fineness - the most 
common of which are XXX, XXXX, and 10X - where the grains are finer as the 
number of Xs increases. 

Because confectioners' sugar dissolves almost instantly, it is generally used 
in dishes and recipes that don't require cooking, such as icings, sauces, and 
some candies. You can cook with confectioners' sugar, but very few people do. 
First, it is about twice as expensive by weight as granulated sugar. Then you 
have to use 1-3/4 cups for every cup of granulated sugar, making it nearly 
twice as expensive again. 

On top of that, you have to take into account that 3 percent cornstarch, which 
will provide some degree of thickening as it cooks. There may be times when you 
want that little bit of thickening, such as a cooked sauce. But there are 
certainly some recipes where the texture would not be benefited by the 
additional cornstarch.   Info taken from http://www.ochef.com/663.htm

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