Bring a large pot of salted water to a boil. Add potatoes and cook until tender but still firm, about 15 minutes. Drain, cool and chop.
Place potatoes and onions in a 9x13 inch casserole dish.
In a medium saucepan combine soup, milk, sour cream and processed cheese; heat until cheese is melted. Pour over potatoes. Dot with butter and covered with shredded cheese.