Like traditional latkes, these are good with sour cream and applesauce.
Line colander with paper towels. Place potatoes and shallots in colander, and let stand for 15 minutes. Squeeze out excess moisture.
Place bread in a food processor; pulse 10 times or until coarse crumbs measure 1/4 cup. Lightly spoon flour into a dry measuring cup; level with a knife. Combine potato mixture, breadcrumbs, flour, sugar, salt, pepper, and egg in a bowl. Divide mixture into 8 portions. Pat each portion into a 1/4-inch-thick patty.
Melt 1 1/2 teaspoons butter in a large nonstick skillet over medium-high heat. Add 1 1/2 teaspoons oil to pan. Add 4 patties to pan; cook 3 minutes on each side or until golden brown. Repeat procedure with remaining butter, oil, and patties.