Scrub potatoes and place in a medium saucepan; add water to cover. Bring to boiling; reduce heat. Simmer, covered, for 15 minutes or until just tender. Drain well; cool slightly. Quarter potatoes, leaving skins on the potatoes.
Meanwhile, for dressing, in a large mixing bowl combine sour cream, yogurt, red sweet pepper, yellow sweet pepper, celery, carrot, salt, and pepper. Carefully stir quartered potatoes into dressing mixture. Cover and chill for 4 to 24 hours. (If the potato salad seems thick after chilling several hours, gently stir in 1 tablespoon milk before serving.) Makes 6 servings.