Thing is you really should not add any water, as the matter of fact some recipe sugest to strain all the juices after potato is grating. i am against it, but that is already another thread. The thing is when you add water and the drain you will rince out all starches, and starch, IMHO is very important to making a good latke. it is so important that there are recipes out there that calls for adding some starch. i am agains that too, but that is another thread again.
All you need is a greated onion. i greated potato last night left it open seating on the counter, went and made tomato soup and potato barely got light brownish. Really.
And i still did not heare from the original poster, why is it so important for potato not to darken. After you fry the latkes they will be brown anyway. Well, golden brown.