In a large saucepan cook onion in margarine or butter until tender but not brown. Stir in flour, salt, and pepper. Add milk all at once. Cook and stir over medium heat until thickened and bubbly. Remove from heat and stir in cheese and parsley until cheese is melted.
Meanwhile, thinly slice potatoes (should have about 6 cups). In a 2-quart rectangular baking dish place half of the potatoes. Cover with half of the sauce. Add all of the roasted peppers. Repeat layers of potatoes and sauce.
Bake, covered, in a 350 degree F oven for 1-1/4 hours. Uncover and bake 15 minutes more or until potatoes are tender. Garnish with rosemary or parsley sprigs, if desired. Makes 6 to 8 servings.