Place potato, water, and salt in a small Dutch oven, and bring to a boil. Reduce heat, and cook 15 minutes or until tender. Remove from heat; add butter and 1/2 cup sugar, stirring well. Allow mixture to cool.
Dissolve yeast in warm water in a large bowl; add 1 teaspoon sugar, and set aside.
Place potato mixture, milk powder, and eggs in container of electric blender; process until mixture is smooth. Combine potato mixture and yeast mixture; stir well. Add flour, stirring well.
Turn dough out onto a floured surface, and knead 8 to 10 minutes or until smooth and elastic. Place in a well-greased bowl, turning to grease top. Cover and let rise in a warm place (85°), free from drafts, 1 1/2 to 2 hours or until doubled in bulk.
Punch dough down; divide into 4 portions. Shape each into a loaf. Place in well-greased 7 1/2- x 3- x 2-inch loaf pans. Cover loaves; let rise 45 minutes or until doubled in bulk.
Bake at 375° for 30 minutes or until loaves sound hollow when tapped.