Add the chopped peaches to a bowl and toss with 1/2 cup of the sugar.  Cover and set aside for 30 minutes.

Combine the remaining 1/2 cup sugar with the cream, milk, and vanilla in a medium heavy sauce pan and bring to a gentle boil over medium heat.  Remove from the heat.

Beat the egg yolks in a small bowl until frothy and lemon colored, about 2 minutes.  Whisk 1 cup of the hot cream mixture into the egg yolks in a slow, steady stream.  Gradually add the egg mixture to the hot cream mixture, whisking constantly.  Cook over medium-low heat, stirring as needed until thickened, about 5 minutes. 

Remove from the heat and strain through a fine-mesh strainer over the peaches.  Cover with plastic wrap, pressing it directly against the surface of the mixture to keep a skin from forming.  Refrigerate until well chilled, preferably overnight.

Pour mixture into an ice cream maker and freeze according to the manufacturer's instructions.  Transfer to an air tight container and freeze until ready to serve.