Au gratin potatoes are a classic dish that has been popularized in different countries such as the U.S., France, and Italy. The difference between scalloped and au gratin potatoes can be seen in the preparation. Scalloped potatoes are typically baked until golden brown and then topped with a white sauce made of cheese, milk, and butter. Au gratin is prepared in a dish and baked until it becomes brown on top with cheese melted over the top.