since seeing Xavier's most excellent tip that Sugar Sweet Sunshine opened on Rivington I've been there a few times, and I gotta say - I love this place.
their cupcakes are so good. the cake has that lovely homemade taste (not as dense as Cupcake Cafe or Magnolia, but I'm more of a "traditional" cupcake fan and like Sugar Sweet's better) and their butter cream icing is wonderful, rich but light and fluffy, and great flavor (the vanilla is heavenly). they usually have at least 6-8 varieties - I had a pistachio with vanilla icing recently that was great. Nice touch using many different pastel colors and light sprinkles gives them a festive look. for a small gathering I picked up 4, and boxed they looked as nice as Magnolia (and at $1.50 a piece, about half the price). cakes are very good - huge slices, so moist and many flavors (getting one for my GF's b-day this month.) also enjoyed their banana pudding with vanilla wafers.
another reason to love this place is the friendly, homey and unpretentious vibe - a small, local sweet shop with nice people working there and people handing out having coffee and a cupcake, reading the paper and chatting.