How to Make It
In a food processor, combine the garlic, sugar, shallots, fish sauce, lime juice and pepper. Add the lemongrass and the 1/4 cup of vegetable oil; process to a puree. Arrange the shrimp in a large, shallow glass dish in a single layer and pour the marinade on top; turn the shrimp to coat thoroughly. Cover and refrigerate for 2 hours.
Light a grill. Cut each sugarcane stick in half on a sharp diagonal so each piece has a sharp point. Scrape off most of the marinade. Working with the shrimp's natural curl, use a small, sharp knife to make 2 slits—one near the tail end and one near the head. Thread a sugarcane stick through the slits; the shrimp should lie flat. Repeat with the remaining shrimp.
Grill the shrimp over a hot fire, brushing them once or twice with oil, until lightly charred and just cooked through, about 3 minutes per side. Transfer the shrimp to a platter and sprinkle the peanuts and cilantro on top. Serve the shrimp with the Vietnamese Dipping Sauce.
Sugarcane swizzle sticks are available in the fruit department of many large supermarkets. Alternatively, look for canned sugarcane in syrup at Asian markets; you'll have to drain the sugarcane and cut it into lengthwise sticks with a sharp knife.