A good protein filled bread (perfect for toddlers who only eat a few bites of food at any given meal!) I prefer to dice the cheese, rather than grate it, because then the machine doesn't mash it all up and you get the occasional bite of cheese in the bread... but it works just as well grated!
addendum: i've made this recipe a few times since posting, and have found that i've needed to add another 1/4 c. milk, and decreased the salt to about 1/4 tsp. i found that after a few tries as the original recipe that it was a little too dry and didn't rise as much as i'd like. the dryness could be because i live in a super dry climate, so it might not be so for everyone. and i'm sure the yeast issue was because i like a super cheesy bread, and there's a lot of salt in cheese... hope this helps!