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I have a deep and abiding love for cipollini onions, the little disk-shaped onions that you used to see only in fancy restaurants, but are now available all over the place. They're far sweeter than regular onions, which makes them ideal candidates for caramelization, and the easiest way to accomplish that caramelization is by using the oven. You can use a similar technique to roast pearl onions and shallots, too.
Roasting cipollini or pearl onions or shallots has the same goals as caramelizing standard onions for soup or dip: The results should be sweet and tender. The toughest part about the whole process is peeling the little guys, especially pearl onions. Blanching them briefly will help with the peeling, and I've found that you can use frozen pearl onions in a pinch, too.
Start your onions in an oven-safe skillet with butter, then transfer the skillet directly to a moderate (325°F/160°C) oven and roast, tossing occasionally, until the onions are completely tender and caramelized.
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Onions are high in sugar, but prone to burning. You want to cook them very slowly so that their sugars break down and form sweeter compounds, all while making sure that they don't burn and turn bitter. The easiest way to do this is to start them in a skillet.
I like to use butter for my onions, though olive oil works fine as well. By starting them in a skillet, then transferring that skillet to the oven, you can very easily toss and flip the onions as they cook, which is important. They get very soft if you're doing it right, so you'll want that easy flip built into the cooking vessel.
Though pearl onions or shallots will work just fine, cipollini are significantly sweeter than either, and thus all the better for caramelizing.
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