Spray a shallow 15x10x2-inch roasting pan with nonstick spray coating. Scrub potatoes, peel if desired. Cut potatoes into 1-inch wedges or cubes. Toss with the 2 tablespoons olive oil. Place in prepared pan. Roast, uncovered, in a 425 degree F oven for 35 to 40 minutes or until just tender and lightly browned, stirring about 20 minutes.
Meanwhile, in a blender container combine the 1/4 cup olive oil, the 1/2 cup basil, garlic, lemon peel, lemon juice, mustard, salt, and pepper. Cover and blend until nearly smooth. In a large bowl toss with hot potatoes; stir in shallots and pepper strips. Let stand at room temperature for 1/2 hour. Sprinkle with the 1/4 cup slivered basil and Parmesan cheese just before serving. Store any leftover salad, covered, in the refrigerator. Makes 8 servings.