1. Place cherries in small bowl with enough hot water to cover; soak until plumped, about 10 minutes. Drain. Set aside.
2. Blend both cheeses, egg yolks, and vanilla extract in processor just until smooth, about 30 seconds. Add flour, sugar, and salt and mix in, using on/off turns, just until blended. Transfer batter to large bowl. Mix in reserved cherries and chopped walnuts.
3. Using electric mixer, beat egg whites in large bowl until stiff but not dry. Gently fold whites into batter in 3 additions.
4. Melt 1 tablespoon butter with 1 tablespoon oil in heavy large nonstick skillet over medium heat until hot but not smoking. Working in batches, drop batter by heaping tablespoonfuls into skillet and spread to 2 1/2-inch rounds. Cook until bottoms are golden, about 1 1/2 minutes per side. Using slotted spatula, transfer latkes to plates. Add more butter and oil as necessary and allow to get hot before adding more batter. Serve immediately with Cherry-Apple Sauce .