Add salt to water in a large saucepan and bring to a boil. Add potatoes and return to a boil. Reduce heat. Cover and cook 15 to 20 minutes, until tender. Drain.
Mash potatoes until no lumps remain. Gradually beat in milk and ¼ cup butter. Cover and set aside.
Melt ¼ cup butter in a skillet over medium heat. Sauté onions and shredded cabbage for about 5 minutes.
Fold bacon and onion/cabbage mixture into mashed potatoes. Season with salt and pepper to taste.
Transfer mixture to a large serving bowl.
Serve warm as a side dish with slices of corned beef, pork or lamb.