There were no complaints from either manager after mistakes by officials provided a balance in a thrilling Cup tie at Vicarage Road.
Watford were gifted a fifth-minute goal by the linesman when Heidar Helguson's header bounced down off the bar and onto the line.
Television replays showed that the ball had bounced on the line but Chelsea manager Claudio Ranieri said afterwards: "Watford had other chances anyway. I make mistakes, the players make mistakes and the linesman made a mistake." Watford were robbed of a penalty in the second half when Gavin Mahon was brought down in the penalty area by Claude Makelele but referee Alan Wiley waved play on.
"The players felt there was a cast iron penalty for the foul on Gavin but I thought the referee did superbly throughout," said Watford boss Ray Lewingon.
He added: "That decision balanced up the situation because I'm told our first goal should not have been allowed." Ranieri was annoyed that Watford were quicker out of the blocks and when Paul Devlin passed the ball back to Neal Ardley his cross was met by Helguson whose looping header beat the keeper but did not cross the line, only for the referee's assistant to flag for a goal.
Watford continued to press with Micah Hyde heading over and Paulo Vernazza seeing his shot cleared off the line by Marcel Desailly.
But after 32 minutes Jesper Gronkjaer escaped his marker and broke into the box only to be brought down by Lenny Pidgeley, the keeper on loan from Chelsea.
Eidur Gudjohnsen fired in the equaliser but within a minute Watford were back in front.
The Chelsea defence, which looked vulnerable to crosses all afternoon, was beaten when a Lee Cook free-kick was headed across goal by Marcus Gayle and Mahon was there to head home from close range with keeper Neil Sullivan in no mans land.
But Chelsea were on terms before the break when Frank Lampard fired in a shot which deflected off the foot of Hyde to give Pidgeley no chance four minutes before the interval.
The second half was more evenly contested with Watford clearing off the line to deny Geremi and Sullivan blocking a close-range shot from Hornets substitute Danny Webber.
Cash-strapped Watford, whose players have still been docked 12 per cent of their wages since the clubs financial crisis 15 months ago, picked up Â£500,000 from their share of the attendance and television money and could double that with the replay income from Stamford Bridge.