Scalloped potatoes are a casserole of potatoes and sauce, just as Callisto said. Technically (and the terminology I follow), when cheese is added it is called potatoes au gratin or even scalloped potatoes au gratin in some older cookbooks.
Some recipes call for the potatoes to be cooked first as in a wonderful dish I do called Gratin Daphenoise, where you simmer the potato slices in heavy (whipping) cream until blanched, then layer them in a dish with grated gruyere cheese and lots of garlic. Then you pour the cream over. But if it has cheese in it, it is technically au gratin, whether you cook the potatoes first or not.
Now, I have seen over the years many people just calling it scalloped potatoes because they always put cheese in it and it is easier to say. So, once again, Technically, it is potatoes au gratin when it has cheese, but commonly, people do interchange the name. Hope that helps clear up the confusion.
By the way, when I made them I just cooked the bacon enough to render a bit of fat and let it finished cooking in the casserole. I just find that this brings out the bacon flavour better, but it is whatever you are used to.
