Place the potatoes into a large pot, and fill with enough cold water to cover. Bring to a boil, and cook for about 10 minutes, or until fork-tender. Drain, and set aside to cool.

While the potatoes are cooking, place the bacon in a large deep skillet over medium-high heat. Fry until browned and crisp, turning as needed. Remove from the pan, drain on a paper towel, then chop and set aside.

Add onion to the bacon grease, and cook over medium heat until browned. Stir in the vinegar, water, sugar, mustard, salt and pepper. Cook for 2 minutes, and then turn off the heat.

Add the hot dressing to the potatoes and gently toss to coat. Fold in the bacon and parsley and season with salt and pepper to taste.