Au Gratin Potatoes

2 pounds potatoes, peeled and sliced thin
1 meduim onion, chopped
1/4 cup butter
1 teaspoon all purpose flour
1 teaspoon salt
1/4 teaspoon ground black pepper
3 cups cheddar cheese, shredded
paprika

Pre-heat oven to 375 degrees. Layer potatoes in a lightly greased baking dish. In a medium saucepan, cook butter and onion until onion is tender. Stir in salt and pepper. Add flour, and reduce heat to low. Cook and stir constantly until mixture is bubbly. Remove from heat. Stir in milk, and 2 cups of cheese. Heat to boiling, stirring constantly. Boil and stir for one minute. Pour cheese sauce over potatoes in pan. Bake uncovered for 1 hour or until potatoes are tender. Sprinkle with remaining cheese and paprika to taste. Allow to sit for a few minutes before serving.
** I like to add some smoked ham to this and make it the main course. I use Cure 81 ham and usually get a 1/4 portion. These potatoes are an Easter tradition at our house!**