Steve Kember's battling Eagles finished with ten men as Michael Hughes was sent off after receiving two yellow cards late on in the second half.
Hughes making his Palace debut could not believe the decision that referee Phil Dowd insisted the midfielder had made a two-footed tackle. The Eagles have now seen red four times in the first week of the season but managed to hold out for a 1-0 win against Watford at Selhurst Park.
Palace started the better side but the Hornets could so easily have opened the scoring when Danny Webber struck his header over an open goal following good work from the Icelandic midfielder Heidar Helguson who delivered the perfect cross.
Ray Lewington's outfit were made to pay at the other end when Neil Shipperley opened his scoring account for the Eagles with the easiest of headers after being found by Danny Butterfield with a deep cross from the right.
That goal came on 14 minutes and from then on Watford got better and better.
A former Eagle Bruce Dyer missed an absolute sitter four minutes before the break when he sidefooted a good yard wide in front of an open goal.
After the break Kember brought on Wayne Routledge and changed to a 4-3-3 formation and immediately Palace were on the offensive as Dougie Freedman and Routledge lashed over a few minutes later.
But after a brief flurry from Kember's lads Watford took control again and Palace had to thank Matt Clarke with super stops to deny a header from Helguson and a diving stop from Gavin Mahon.
Hughes then got his marching order to leave Palace down to ten players, but they held on with few worries but they are getting quite used to that.