Coat a 13x9x2-inch (3-quart rectangular) baking dish with cooking spray.
In a small saucepan, combine water and onion. Bring to boiling; reduce heat. Cover and simmer for 2 to 4 minutes or until onion is tender. Remove from heat. Do not drain.
In a large bowl, stir the undrained onion mixture into the soup; add milk and pepper. Stir in potatoes, cheese, and sour cream. Transfer to prepared dish.
Cover and bake in a 350 degree F oven for 1 hour. Stir mixture.
Toss crushed cornflakes with melted butter. Sprinkle over the potato mixture. Bake, uncovered, for 30 to 40 minutes more or until potatoes are tender and bubbly in center. Makes 8 side-dish servings.