Heat the olive oil in a large skillet over medium-low heat. Add the onions and cook until soft and translucent about 10 to 15 minutes. Add the sugar, red wine vinegar and 3 tablespoons water and cook until the liquid is reduced completely and the onions are caramelized, about 10 minutes.

BE CAREFUL as you approach carmelization - there's a very fine line between done and burnt.

tags: vegetarian, vegan, pareve

source: http://www.foodnetwork.com/recipes/brian-boitano/grilled-cheese-sandwich-with-red-onion-jam-recipe/index.html