Palace kicked off in the Selhurst sunshine towards the Holmesdale against Sheffield United and had the better of the opening exchanges with neat passing and Paul Dickov looking eager to impress upfront.
The first real chance came in the 23rd minute when Leon Cort flashed a header just wide of Paddy Kenny's post following Stuart Green's free-kick from the right.
Palace had the majority of possession in the opening half hour, freely passing the ball around and making the centre-back pairing of Sheffield United, which included recent Aston VIlla loan signing Gary Cahill making his debut, work hard to repel the constant delivery of set pieces from Green, Ben Watson and Tony Craig.
This period of possession led to James Scowcroft guiding his free header over the bar from close range following a Stuart Green corner in the 29th minute.
In response, the Blades couldn't offer much up front, despite including the Championship's top scorer James Beattie in their ranks. Beattie, who has scored six goals in six league appearances for the Blades so far this season, had his first real chance when he headed over in the 37th minute, but chances at the front for United were at a premium.
In the 39th minute, another Watson free-kick saw Mark Hudson direct his header over the bar, with the former Fulham man claiming he was pulled back by a United defender.
However, a warning of things to come for Palace came just four minutes later when former Newcastle winger Keith Gillespie was allowed to run unchallenged through the middle of the park, forcing an awkward save from Julian Speroni down to his left.
This was to prove the last chance of a half in which Palace peppered the Sheffield United box with a mixture of crosses from both flanks, but unable to provide the finishing touch.
However, despite Sheffield not threatening at all in the first half, Peter Taylor's men got off to the worst possible start when they went 1-0 down in the 48th minute as Mark Hudson put through his own net following a left-wing cross from Keith Gillespie.
Dougie Freedman was brought on for Stuart Green in the 55th minute and one minute later, Paul Dickov controlled the ball just inside the box, but fell under pressure from the Blades' captain, Chris Morgan, with the Scotsman claiming it was a penalty.
It was the substitute Freedman who made an immediate impact in the 60th minute, when his jinking run past two United defenders culminated in a pass to the onrushing Tom Soares who smashed home into the top of the net to make it 1-1.
Two minutes later a United break saw Jon Stead provide Keith Gillespie with a pinpoint cross to the edge of the box, but the winger could only volley over.
But it was Freedman again who provided the cutting edge upfront as he created two chances within seconds of each other in the 62nd minute. First, he saw his volley smothered by a desperate United defence and then his mazy run saw him provide James Scowcroft on the edge of the box with a pass which the Bury-born forward delivered to Paul Dickov who flashed his half-volley just wide.
With the game opening up, United provided a threat again to Julian Speroni in front of the Holmesdale Road end when Stead turned his marker and fired just wide in the 63rd.
Palace then went deservedly 2-1 up in the 70th minute when Freedman again tormented the United defence with his deep runs from the left, before playing in overlapping Tony Craig, whose left-wing, byline cross was headed over Paddy Kenny by a United defence into the path of captain Carl Fletcher who buried the ball in the roof of the net from close range to put the Eagles in front.
Despite creating the majority of chances, Sheffield United made it 2-2 in the 76th minute as James Beattie ran through onto a hopeful through-ball and capitalised on the hesitation in the Palace defence to lob the ball over Speroni and make for a nervous remaining 15 minutes.
Both managers felt the game was theirs for the taking with Bryan Robson and Brian Kidd introducing Danny Webber in place of defender Leigh Bromby and Peter Taylor bringing on Besian Idrizaj and Jeff Hughes.
In the 86th minute substitute Idrizaj caused havoc in the Sheffield United defence and as Palace turned the screw Tom Soares fell under pressure from Chris Morgan following a ball into the box. Referee Kevin Friend adjudged it was a foul and pointed to the spot, which Ben Watson put away with aplomb infront of the Whitehorse Lane end with just a minute to go.
An extra four minutes of injury time added to the drama and tension inside Selhurst Park, but the final whistle sounded and Palace secured a much-needed maximum points.
Crystal Palace: Speroni, Craig, Hudson, Cort, Fletcher (c), Scowcroft (Idrizaj, 85), Watson, Soares, Butterfield, Dickov (Hughes, 83), Green (Freedman, 55)
Subs: Flinders, Lawrence
Sheffield United: Kenny, Bromby (Webber, 78), Naysmith, Morgan (c), Beattie, Stead, Montgomery, Tonge, Gillespie (S. Quinn, 74), Armstrong, Cahill
Subs not used: Lucketti, Sharp, A. Quinn
Scorers:
Palace: Soares (60), Fletcher (70), Watson (89 pen)
Sheffield United: Hudson (48 og), Beattie (76)
Attendance: 14,131
Man of the Match: Dougie Freedman
Referee: K. Friend
Assistants: M. McCoy, G. Scott
Fourth Official: D. Sheldrake


















