Sam Allardyce took charge of his first Palace game at Watford on Boxing Day but had to contend with more injuries to the Palace squad as both James McArthur and Joe Ledley were added to an already long list of players unavailable.
The home side made two changes to their line up following their single goal defeat in their last outing at Sunderland.
A bad start for Watford on just two minutes as Daryl Janmaat had to be stretchered off the field and was replaced by Camilo Zuniga.
A foul on Wilfried Zaha just outside the box gave Palace an early chance as Yohan Cabaye played a free kick into the box but it was deflected out for a corner, one of a number the visitors had in the opening five minutes of the contest.
Only fourteen minutes into the game and the home side had used two subs as Valon Behrami had to leave proceedings with an injury and was replaced by Troy Deeney.
A minute later and Christian Benteke caused Heurelho Gomes into a save as he headed an Andros Townsend cross towards goal but the effort lacked power and it was an easy save for the ‘keeper.
Cabaye was inches wide from giving his side the lead when a ball came back to him just outside the box after good work from Benteke but it was not long before the Frenchman had his name on the scoresheet.
The breakthrough coming on the 25th minute mark as Andros Townsend did some great work down the right to get clear of his man and then he found Cabaye in space and he made no mistake slotting the ball into the net, from inside the box, past Gomes to give the Eagles the advantage.
On the 35th minute Palace had a chance to increase the lead after Christian Benteke was fouled in the box by Gomes but the same player got up to take the spot kick and had his effort saved as the ‘keeper dived to his left and pushed the shot away.
The first half penalty save meant Palace missed the chance to go into the break with a solid advantage but at the other end the home side failed to force Wayne Hennessey into a first half save.
Watford started the second half with the majority of the possession but it was only a cross from Adlene Guedioura that he had to come and claim before the action was back at the other end of the pitch.
Townsend curled a shot over the bar from the edge of the box and then a cross from Puncheon in front of goal was just too long for Benteke to get on the end of.
On 58 minutes Odion Ighalo had the best chance from the home side of the game so far as he beat his man to get the shot in on goal but didn’t trouble Hennessey as the effort went wide of the target.
Referee Mark Clattenburg awarded a second spot kick of the game with twenty minutes remaining as Sebastian Prodl was adjedged to have been fouled by Damien Delaney. Deeney stepped up to fire the ball past Hennessey to bring the scores level and score his 100th goal of his Watford career.
At the other end Dann headed over the bar from Puncheon's cross before two changes were made by Sam Allardyce with Jordon Mutch and Fraizer Campbell joining the game for the remainder.
A late call for another penalty came from the visitors as Zaha went down in the box but the official gave the free kick the other way and cautioned the Palace winger.
That was about it for the action at Vicarage Road and the game finished level.
Watford: Gomes, Kaboul,Prodl, Britos, Holebas, Janmaat (Zuniga), Guedioura, Behrami (Deeney ), Amrabat, Capoue (Sinclair ), Ighalo
Subs not used: Cathcart, Doucoure, Kabasele, Pantilimon
Booked: Britos, Holebas
Crystal Palace: Hennessey, Kelly, Dann, Delaney, Ward, Townsend (Mutch), Puncheon, Flamini (Campbell), Cabaye , Zaha, Benteke
Subs not used: Speroni, Chung-yong Lee, Fryers, Husin, Wan-Bissaka
Booked: Delaney, Puncheon, Zaha, Benteke
Referee: Mark Clattenburg