Step 1In the bowl of a stand mixer fitted with the whisk attachment, sprinkle the gelatin over one-fourth cup of water and let stand until the gelatin is softened. If piping chick-shaped candies, fit a piping bag with a large, round tip (preferably one-half inch) and place the colored sugar in a bowl. If cutting out shapes, butter the baking sheet and line with parchment paper, then butter the parchment paper.
Step 2In a large saucepan, combine the remaining water with the sugar and corn syrup, and cook until the sugar reaches 245 degrees using a candy thermometer. Remove from heat.
Step 3With the mixer running on low speed, slowly pour the hot sugar syrup down the side of the mixer so it doesn't splash against the whisk. Slowly increase the mixer speed to high and beat until the marshmallow lightens in color, about 6 minutes, then beat in the vanilla. For piped marshmallows, continue beating on high speed until the marshmallow firms and stiffens in texture (similar to a stiff meringue); the marshmallow will have lost some of its sheen and should break off as the beater is removed, but it should not be overly stringy, 10 to 16 minutes. For cut marshmallows, beat less, only until the marshmallow is fluffy and doubled in volume, 8 to 10 minutes total.
Step 4To pipe marshmallow chicks, start by piping the body: Hold the piping bag over the colored sugar and begin piping the marshmallow out onto the sugar so it is about 1-inch in diameter and approximately one-half-inch thick. Continue piping the body so it is about 2 1/2 inches in length, then slowly release the tip from the marshmallow, pushing the marshmallow up to form a tail. To form the chest and head, pipe on top of the body, starting from the front of the body and piping over half of the back. Continue piping, but reversing direction, to form the head, slowly releasing the tip to form the beak. Spoon the colored sugar over the formed marshmallow to coat completely. Remove the marshmallow to a parchment-lined baking sheet.
Step 5To form cuttable marshmallows, using a lightly greased offset spatula, immediately spread the mixture onto the buttered parchment-lined sheet, spreading the marshmallow so it covers the pan in an even layer. Set aside, uncovered, 2 to 4 hours to set. When the marshmallow is set, cut out shapes using lightly greased cutters. Gently press the marshmallows in colored sugar to evenly coat.
Step 6Form the eyes: Place the chocolate chips in a glass measuring cup or bowl and microwave in 10-second increments, stirring occasionally, until melted. Use a toothpick to dot the melted chocolate over the candies to form eyes (and noses, for marshmallow bunnies).