Heat oven 350°F. In Dutch oven, combine potatoes, 1 cup onions and 2 cups water. Cover; bring to a boil. Cook over medium heat for 5 to 8 minutes or just until potatoes are tender. Drain.
Meanwhile, in small bowl, combine sour cream, cheese, milk and salt; blend well. Set aside.
Spray 12x8-inch (2-quart) glass baking dish with nonstick cooking spray. Place potato mixture in sprayed baking dish; spread evenly. Spoon sour cream mixture evenly over top.
Bake at 350°F. for 10 minutes or until thoroughly heated. To serve, sprinkle with green onions. If desired, sprinkle with freshly ground black pepper.