Preheat oven to 350 degrees F (175 degrees C). Lightly grease and flour one 9x13 inch baking pan.
In a large mixing bowl, cream 1/2 cup of the butter and all of the white sugar until light. Beat in eggs one at a time, mixing well after each one. Stir in 1 teaspoon of the vanilla.
Sift together flour, baking powder, baking soda,1/4 teaspoon of the salt, and cocoa. Add to creamed mixture alternately with the water beating after each addition. Stir in the sauerkraut. Pour batter into prepared pan.
Bake at 350 degrees F (175 degrees C) for 35 to 40 minutes. Let cake cool in pan and then frost with Sour Cream Chocolate Frosting.
To Make Frosting: Melt semi-sweet chocolate chips and the 4 tablespoons of butter. Blend in the sour cream, 1 teaspoon vanilla, 1/4 teaspoon salt. Gradually add confectioner's sugar until frosting is of spreading consistency. Beat well. Spread onto cooled cake.
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