Position knife blade in food processor bowl; add all ingredients.
Process until peaches are finely chopped.
Pour mixture into an 8-inch square pan; freeze until almost firm.
Break mixture into large pieces, and place in processor bowl.
Process several seconds or until fluffy but not thawed.
Return mixture to pan, and freeze until firm.
Let stand at room temperature 10 minutes before serving.
Scoop sherbet into individual dessert bowls.