In large glass bowl, combine sugar and water. Use HIGH power setting on microwave, and heat 3 to 4 minutes or until sugar is dissolved, stirring once. Add cranberries and heat, covered, 5 to 6 minutes or until berries are very SOFT.
Meanwhile, grate peel from orange and squeeze juice. Add peel and juice to cranberries. Place mixture in a food processor and process until desired smoothness. Cool slightly. If desired, add additional sugar to taste; chill before serving.