Cook bacon in large nonstick skillet until crisp. Remove bacon from skillet; reserve drippings in skillet. Drain bacon on paper towel; crumble. Set aside.
Reserve 2 tablespoons onions for garnish. Add remaining onions, bell pepper and potatoes to bacon drippings in skillet; cover and cook over medium-high heat for 7 to 9 minutes or until vegetables are crisp-tender, stirring frequently.
Meanwhile, in small bowl, combine water, vinegar, sugar, cornstarch, salt and pepper; blend well.
Add cornstarch mixture to skillet; cook and stir 2 to 3 minutes or until sauce is bubbly and thickened. Arrange bratwurst over potato mixture; push gently into potatoes. Reduce heat to medium-low; cover and cook 7 to 9 minutes or until bratwurst are thoroughly heated. Sprinkle with reserved green onions and crumbled bacon.