Hornets manager Ray Lewington gave some younger players an opportunity with goalkeeper Richard Lee making his debut, while Sheffield United boss Neil Warnock rested some of his stars from the starting line-up before the play-offs including Michael Brown, Michael Tonge and Steve Kabba.
In a scrappy first half, Blades midfielder Stuart McCall went closest to breaking the deadlock. He fired a long-range strike which young goalkeeper Lee tipped against the angle of post and crossbar and out for a corner.
Jason Norville, Scott Fitzgerald and Neil Cox went close with efforts for the Hornets in the first half, while Carl Asaba and Peter Ndlovu did likewise for the visitors.
Mark Rankine drilled a long-range effort wide in the early stages of the second half while Allan Nielsen did similar for the home side.
Tonge went on for injured McCall soon afterwards and the Blades upped the tempo, Peter Ndlovu firing an effort just over.
Fitzgerald tested Gary Kelly with a curling shot from the edge of the area which the Blades goalkeeper kept out with his feet.
But Watford skipper Cox finally broke the deadlock after 64 minutes, firing his seventh goal of the season from close range from Nielsen's corner.
Norville and Cox went close soon afterwards to doubling the home side's lead, while Kabba had an effort tipped over by Lee.
The Hornets deservedly made sure of the points 11 minutes from time when Fitzgerald hit his first goal for the club, tucking away the rebound after Kelly had kept out Cox's header from a Nielsen corner.