I just made this for the first time last night, and my family raved! It's not the easiest thing to make, but not too difficult (just time consuming to slice potatoes, but oh so worth it). This recipe is from the Southern Living Cookbook.
small onions, thinly sliced and separated into rings
ounces shredded cheddar cheese
Melt butter in a heavy saucepan over low heat; add flour, stirring until smooth. Cook 1 minute, stirring constantly. Gradually add milk, cook over medium heat, stirring constantly, until thickened and bubbly. Stir in salt, pepper, and pimento.
Spoon 1/4 cup white sauce into a greased 12 x 8 x 2 inch baking dish. Top with half each of potatoes, onions, remaining sauce, and cheese. Repeat layers, using remaining potatoes, onions, and sauce.
Cover and bake at 350 for 55 - 60 minutes or until tender.
Sprinkle with remaining cheese, and bake an additional 5 minutes.