Preheat oven to 400°F Arrange bread on rimmed baking sheet. Bake until pale golden, then cool.
Butter 8x14" glass baking dish. Melt butter with oil in heavy large skillet over medium-low heat. Add potatoes. Stir to coat and arrange in single layer. Cover and cook until almost tender. Uncover; increase heat to medium-high, and cook until potatoes are lightly browned and tender, stirring occasionally.
Add shallots and sauté until soft, about 2 minutes. Remove from heat. Gently mix in bread and salmon. Transfer mixture to prepared dish.
Whisk eggs and next 5 ingredients in medium bowl to blend well. Pour over potato mixture in dish. Let stand 15 minutes, occasionally pressing bread into custard. (Can be made 1 day ahead. Cover; chill. Let stand at room temperature 30 minutes before baking.).
Bake casserole, uncovered, until custard is set, about 30 minutes. Cut into squares and serve hot.