While potatoes are cooking, fry bacon pieces until crisp. Remove from pan, set aside.
Add diced onion to the bacon fat and cook over medium heat until onion is browned. Add vinegar, water, sugar, salt and pepper. Bring mixture to a boil then add potatoes and 1/2 the bacon pieces. Heat through then transfer to a serving dish, top with remaining bacon pieces. Sprinkle with parsley, if using. Serve warm.