Preheat oven to 350 degrees F. Thinly slice unpeeled round red or Yukon gold potatoes. Peel and thinly slice sweet potatoes.
For sauce, in a medium saucepan, heat butter over medium heat. Add onion; cook about 5 minutes or until tender, stirring frequently. Stir in flour; cook and stir for 1 minute. Add milk all at once. Cook and stir until mixture is thickened and bubbly. Stir in Parmesan cheese, the 1 tablespoon fresh or the dried tarragon, salt, and pepper.
In a greased 2-quart shallow baking dish, arrange half of the round red or Yukon gold potato and half of the sweet potato, alternating in rows if desired. Spoon half of the sauce over the potatoes. Arrange remaining potatoes over layers in dish. Top with remaining sauce.
Cover and bake for 40 minutes. Uncover and bake about 30 minutes more or until potatoes are tender and sauce is golden brown. If desired, garnish with additional fresh tarragon. Makes 8 servings.