Place potatoes and onion into a large saucepan and cover with salted water. Bring to a boil over high heat, then reduce heat to medium-low, cover, and simmer until the potatoes are tender, about 10 minutes. Drain and return to the saucepan.

While the potatoes are simmering, melt half of the butter in a large skillet over medium-high heat. Stir in the cubed lobster, and cook until the edges begin to turn golden, about 5 minutes. Once the potatoes have been drained and returned to the saucepan, stir in the remaining butter, lobster, cream, milk, and sugar. Return to the heat, and cook until hot, stirring occasionally. Once hot, season to taste with salt and pepper and serve.