Cut potatoes into uniform-sized cubes; place in 3-quart saucepan. (Pan should be 3/4 full of potato cubes with enough water to cover; if it isn't, add more potato cubes). Cover and bring to a boil; reduce heat and boil 5 minutes. Test with fork; potatoes should be fork-tender but not break apart. Remove from heat, drain well, and set aside to cool.
Meanwhile, melt butter in small skillet over medium heat. Cook onion, stirring occasionally, until transluscent. Onion pieces should be one layer thick to ensure even cooking. Do not allow onions or butter to brown. When onions are transluscent, remove from heat.
Using slotted mixing spoon, transfer onions to large mixing bowl. Discard any remaining butter. Add cooked, crumbled bacon, mayonnaise, vinegar, salt and pepper. Stir to combine, then add potatoes. Stir until potaoes are evenly coated with mayonnaise. (At first, it will look as if you don't have enough mayonnaise; keep stirring and you should have enough. If not, add a little more, but this recipe is best when potatoes are only lightly coated). Adjust seasonings to taste.
Transfer to serving bowl, sprinkle evenly withh paprika. Cover tightly; chill 12-24 hours to allow flavors to blend.
Go to full version of