Check out this recipe from "The Milk-Free Kitchen" by Beth Kidder. I've used
this lemon frosting recipe with great results and raves from both my milk-
allergic son and relatives and friends:

3 tbspns milk-free margarine (the best is the Fleishmann's great for baking
pareve margarine)
1-1/2 cups confectioners' sugar
1/8 tspn salt
1tspn freshly grated lemon rind Or 1/2 tspn lemon extract
2 tbspns water or orange juice

  In the small bowl of an electric mixer beat together 1 cup of confectioners'
sugar, the salt, lemon rind (or extract), and half of the liquid. Add more
liquid and more sugar as needed to get a creamy frosting that spreads easily.
Lemon juice is not a good choice for the liquid, as it will make the frosting
taste thin.

This should be enough for one 8- or 9-inch layer. To frost the tops and sides
or two 9-inch layers, use: 1/2 c. margarine; 4 c. confectioners' sugar; 1/2
tspn salt; 1 tbspn lemon rind or 1 tspn extract. Beat the margarine with 3 c.
of confectioners' sugar to start.

Hope this helps!
Rose