1. In 3-quart saucepan, sprinkle gelatin evenly over half-and-half; let stand 1 minute to soften gelatin slightly. Cook over medium-low heat, stirring, until gelatin dissolves. Remove from heat; stir in milk, sugar, extract, and salt.
2. In blender at medium speed or in food processor with knife blade attached, blend peaches and lemon juice until smooth. Stir into milk mixture (mixture may look curdled).
3. Pour peach mixture into 13" by 9" baking pan. Cover and freeze, stirring occasionally, until partially frozen, about 3 hours.
4. Spoon peach mixture into chilled large bowl; with mixer at medium speed, beat until smooth but still frozen. Return mixture to pan; cover and freeze until firm, about 3 hours.