Robin van Persie's late winner allowed Arsenal to reclaim a Champions League spot and avoid dropping points at bottom club Watford with a 2-1 victory.
The Dutchman is convinced the Gunners offer more entertainment than Chelsea and Manchester United but the Hornets came close to forcing them to lag even further behind the Barclays Premiership pace-setters.
On a day when Liverpool had lost and Chelsea were held at home by Reading, it needed his 83rd-minute strike to allow Arsene Wenger's side to climb above Bolton, Portsmouth and Liverpool and into third place.
The game was a fascinating contrast of styles as the Premiership's slickest passers struggled to get the better of opponents of limited ability who nevertheless refused to give up.
Wenger opted not to change the side that dismantled Blackburn 6-2 at the weekend with a flurry of late goals and Arsenal started brightly, with only a last-gasp tackle in the box halting Cesc Fabregas' run before Van Persie forced home goalkeeper Ben Foster into the first of many saves.
Foster then denied Fabregas before Van Persie fired across goal and narrowly wide, with the Dutchman back in a few minutes with a volley that the goalkeeper did well to keep out, although a foul for pulling defender Jay DeMerit was also given.
But Arsenal did not have it all their own way, with defender Danny Shittu heading wide from one of the many corners the Hornets had been able to win with their direct attacks.
There was one nervy moment for last year's Champions League finalists when Ashley Young gave Johan Djourou the slip to reach the box and it took a fine tackle from Gilberto to deny him.
The Brazilian then made an even more impressive contribution at the other end by heading Arsenal in front in the 19th minute after Watford had failed to deal with a Tomas Rosicky corner.
Kolo Toure managed to nod it downwards to where Gilberto was lurking at the back post and he had enough time and space to make sure Foster was given no chance from four yards.
Many sides would have been instantly deflated but not Watford, who needed just four minutes to equalise.
Young forced Jens Lehmann into a diving save before Smith beat the German from seven yards after Hameur Bouazza's cross - following a determined charge down the left - was deflected into his path by Djourou.
Arsenal's frustration manifested itself via a wild volley over by Emmanuel Adebayor and some overhit passes by Rosicky and it was a while before Foster was called upon again.
Van Persie's neat turn in midfield allowed him to run at goal, as did Jordan Stewart's slip but Foster was able to gather his attempted cutback and when Fabregas tried a less intricate blaster the goalkeeper was able to watch it sail harmlessly past his near post.
Djourou was replaced by Philippe Senderos at half-time and Foster was required once more within three minutes to deny Rosicky after Gael Clichy had sent him away down the left.
Rosicky again found space on the left but an attempt to set up Adebayor was intercepted by the alert Shittu and when Van Persie eventually found the net, following an initial parry by Foster, the flag had long been raised.
Watford replied by unleashing a barrage of trademark set-pieces and long throws that had Lehmann under pressure and looking flustered.
Fabregas had been quiet for a while but at last found himself with enough time and space in midfield to send Adebayor away from Shittu but Foster was able to block the resulting shot with a boot before denying Justin Hoyte from the next attack.
Bouazza left the pitch clutching an arm after coming off worse in a clash with Toure and was replaced in the 69th minute by Damien Francis.
A second Arsenal change followed a minute later, with Theo Walcott replacing the disappointing Alex Hleb as the minutes began to tick away.
Fabregas and Clichy failed to hit the target as Watford's nerves threatened to get the better of them.
Darius Henderson, the striker who has yet to find the net all season, was sent on for Anthony McNamee for the final 13 minutes to add more power, if not technique.
Arsenal played their final card, with Julio Baptista replacing Rosicky, and it almost paid instant dividends with the newcomer rolling a chance past Foster and inches wide.
Adebayor did exactly the same from the next attack before Van Persie showed them how it should be done in the 83rd minute.
Walcott sent him into space down the right and, after last man DeMerit had been disposed of, Foster was given no chance with a perfectly-placed shot across him.
