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Glazed Pearl Onions and Grapes

['20 ounces red pearl onions', '1/3 cup Sherry vinegar', '1/4 cup water', '2 tablespoons sugar', '1 tablespoon unsalted butter', '1 Turkish or 1/2 California bay leaf', '1 1/2 cups seedless red grapes (about 1/2 pound)']

Preheat oven to 425°F with rack in middle or lower third.
Blanch unpeeled pearl onions in boiling water 2 minutes. Drain and transfer to an ice bath to stop cooking. Peel onions and trim off root ends.
Bring onions, vinegar, and water to a simmer in an ovenproof 12-inch heavy skillet with sugar, butter, bay leaf, 1/2 teaspoon salt, and 1/4 teaspoon pepper, stirring until sugar has dissolved. Cover and simmer 3 minutes.
Uncover skillet and transfer to oven. Roast, stirring once or twice, until most of liquid has evaporated, 15 to 18 minutes. Stir in grapes and roast, stirring once or twice, until liquid glazes onions and grapes, 5 to 8 minutes. Discard bay leaf.
Marimar Estate Don Miguel Vineyard '06

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