Using the grating disk of a food processor, grate the potatoes and the onion. Remove the grated potatoes and onion from food processor work bowl and insert the metal blade into the food processor. Place potatoes and onions back into the food processor; add flour, baking powder, and salt. Process with metal blade until the batter is a well-blended mush.
Pour enough vegetable oil into a large nonstick frying pan or skillet to make a one-quarter-inch layer of oil. Heat oil over medium-high heat for 3 minutes. Drop batter by large spoonfuls into hot oil, forming pancakes that are approximately 2-1/2 to 3 inches in diameter; flatten dough with the back of the spoon. Cook over medium-high heat for 2 to 3 minutes, until edges of latkes turn light brown. Turn latkes over and cook an additional 2 to 3 minutes on the other side, until both sides are browned.
Drain cooked latkes on a few layers of paper towels before serving. Repeat with remaining batter. Serve hot, sprinkled with sugar.