In a saucepan over medium heat, bring sugar and water to a boil; cook for 5 minutes. Add cranberries, orange juice and zest. Return to a boil. Reduce heat; simmer for 8-10 minutes or until berries pop. Remove from the heat; stir in vanilla. Serve warm or chilled over ice cream. Garnish with orange zest if desired. The sauce can also be served over angel food or pound cake.