The showdown with the Eagles was viewed as a crucial encounter at the bottom of the Premier League table with Wolves having been without a win after nine games.
After a goalless first half, there were four strikes during a chaotic second period, Wolves coming from behind to lead before Palace found an equaliser with 13 minutes remaining.
Palace had a potential winner chalked off during the closing minutes, the home side fortunate to avoid succumbing to their eighth defeat in 10 games.
Nevertheless, Wolves sit at the bottom of the table, four points adrift of safety and now as many seven points behind 15th place.
O'Neil defends Wolves substitutions
Shortly after the hour mark, O'Neil chose to make three alterations, withdrawing Toti Gomes, Tommy Doyle and Pablo Sarabia from various areas of the pitch.
The decision was jeered by sections of the home support, who were seemingly of the opinion that Doyle and Sarabia should not have been substituted.
Within 10 minutes of the triple change, Wolves had scored twice, one of the incoming players Goncalo Guedes providing the assist for Joao Gomes' goal.
Speaking after the match, O'Neil used the impact of Guedes - as well as Mario Lemina and Jean-Ricner Bellegrade - as a way of defending himself in light of growing pressure.
As quoted by the Daily Mail, O'Neil said: "Zero concern for my position. I'm fine. It's my job. The place is not going to be rosy and smiley. I fully expected this to be a tough atmosphere, especially when we went behind.
"The fans can voice their opinions, of course. It's my job to make the right decisions. The three substitutes made a big difference and we were excellent after they came on.
"We have not been in the market to sign Premier League-quality players. We are trying to work with players to get them ready and they are learning to perform on the toughest stage in the world. We have to keep fighting."
What next for Wolves?
Wolves next face another potentially mammoth fixture in the context of their season as they square off against 19th-placed Southampton at St Mary's on November 9.
Victory is required for Wolves to avoid heading into the next international break sitting at the bottom of the table, while defeat would see Southampton move four points clear of them.