Melt butter over low heat; add flour, salt & pepper and stir. Add milk, whisking constantly until sauce combines and thickens. (To make sauce in the microwave: Melt butter, then add flour, salt & pepper and stir. Add milk whisking after every minute of cooking, until sauce thickens.) Place half the potatoes in a greased 2-quart casserole; cover with half the onion and half the sauce. Repeat layers. Cover and bake at 350°F about 1 hour. Uncover and continue baking until top is browned.