Preheat the oven to 400°F. Lightly grease two large cookie sheets with rims; we use 18" x 13" half-sheet pans.
1) Grate or shred the potatoes fine, or medium-fine; no need to peel them first, though they should be washed. Some folks like smoother latkes (more finely grated), some crunchier (more coarsely grated). We like to use the fine shredding attachment on our test kitchen Cuisinart.
2) Wrap the grated potatoes in a cotton dish towel (a flour sack towel works well), and twist the towel closed at the top. Bring the potatoes to the sink and squeeze them for all you're worth, wringing as much liquid as possible from them.
3) Shred or grate the onion finely. Don't use the finest shredding disk of your food processor, as it will turn the onion to mush; the medium shredding disk is preferable.
4) Combine the drained potatoes, onion, egg, salt, and flour in a bowl, stirring till everything is thoroughly mixed.
5) Pour a thin layer of vegetable oil into each baking pan. It should be deep enough that when you tilt the pan, you can see it move; 1/8" to 3/16" is about right. We love peanut oil for frying, or plain vegetable oil. Beware of canola oil; some folks feel it gives food an off flavor when used for frying.
6) Drop the pancake batter onto the sheets by the 1/4- to 1/3-cupful. Space them far enough apart that you can easily get a spatula between them to flip them over, when the time comes.
7) Bake the pancakes for 20 to 25 minutes, or until the bottoms are golden brown. Remove the pans from the oven, turn them over, and bake for an additional 10 minutes, until golden brown on the bottom.
8) Remove from the oven, and drain on paper towels. Serve immediately, with applesauce and sour cream, if desired.