To peel pearl onions easily, slice off the root ends and drop into boiling water for less than a minute. Drain and rinse with cold water. Pinch the stem end of each, and a peeled onion will pop out. When they're in the skillet, shake the onions frequently for even browning.

Heat oil in a medium nonstick skillet over medium heat. Melt butter in pan. Add onions, and cook 5 minutes or until lightly browned, shaking pan frequently. Add water and sugar, and bring to a boil. Cover, reduce heat, and simmer 8 minutes. Uncover and cook 2 minutes or until liquid evaporates. Stir in thyme and remaining ingredients; cook 1 minute.