In a small microwave-safe bowl, melt shortening and chocolate at 50% power; stir until smooth. Add water; cool slightly. Transfer to a large bowl. Add the sugar, eggs, milk and vanilla; beat well. Combine the flour, baking soda and salt; add to batter and mix until smooth.
Pour into a greased 13-in. x 9-in. baking pan. Bake at 350° for 28-32 minutes or until a toothpick inserted in the center comes out clean.
Arrange marshmallows over the top; bake 5 minutes longer or until marshmallows are softened. Spread marshmallows evenly over top of cake. Cool on a wire rack.
For icing, in a large microwave-safe bowl, melt chocolate and butter; stir until smooth. Cool slightly. Beat in the milk, vanilla and confectioners' sugar until smooth. Frost cake.