Arteta opened the scoring from the spot before he was harshly adjudged to have fouled ex-Gunner Marouane Chamakh as the striker ran through on goal. Arsenal then soaked up plenty of pressure before Aaron Ramsey set Giroud free to fire home what proved to be the goal that killed the game off.
Keith Millen, Palace's caretaker manager, set his team up to contain the Gunners from the start. In the first half contain them they did. Arsenal were poor in possession and were second to the ball for most of the first 45 minutes as Palace set the tempo. Barry Bannon went close on a couple of occasions and Julian Speroni did not have a single save to make before the penalty.
The opening goal came after a needless challenge by Adlene Guedioura on Serge Gnabry in the opening seconds of the second half. Millen must surely have been incensed by the lazy and easily avoidable challenge that gave the advantage to the visitors.
Arteta stood up and duly dispatched the spot kick.
Palace, however, refused to lie down and continued to apply pressure on a fragile looking Arsenal defense. If they possessed a striker the caliber of Giroud then they would have surely won the game.
Arteta then went from hero to villain when he received his marching orders for a foul on Chamakh. The decision was harsh to say the least as there was no intention in the foul.
Palace failed to take advantage of their numerical superiority and the Gunners scored a late goal through Giroud. The Frenchman did little throughout, but popped up when his team needed him most.
In the end one could see the relief on Arsene Wenger's face as the Frenchman knew his team had just got out of jail to move five points clear at the top of the Premier League.
Here, Bleacher Report looks at six things we learned from Crystal Palace vs. Arsenal...
There have been many heroes in Arsenal's fantastic start to the season, but none, perhaps, as important as Mathieu Flamini.
The French international has made nine appearances for the Gunners since he re-joined the club during the summer transfer window.
The only two defeats Arsene Wenger's team have suffered this season both occurred when Flamini was not on the pitch. Today he was forced off the pitch after just eight minutes with what appeared to be a groin related injury.
His disciplined approach to the game has provided the very foundation for all of the Gunners' best performances. Flamini does the heavy lifting for the likes of Aaron Ramsey and Mesut Ozil, who have gone on to earn great plaudits, and he does it without fuss or the need for praise.
It says much that Palace dominated midfield following Flamini's forced substitution. Barry Bannon and Kagisho Dikgacoi took full advantage of Arsenal's reshuffling and won most of the 50/50 challenges.
It took Mikel Arteta and Ramsey some time to get their act together which could mean midfield problems ahead of the Gunners' toughest section of the season.
Damien Delaney was easily Palace's best player against Arsenal.
The 32-year-old, playing for his ninth club, has been one of Palace's best players during this troubled season. He has put in a number of sterling performances this term and it was no surprise to see him keep Olivier Giroud quiet.
The much-heralded Arsenal striker was anonymous until he scored. Giroud continued to work, even when the game was going against him, and deserves credit for his goal. So too, however, does Delaney deserve credit for another solid performance.
The Corkonian was called into the most recent Ireland squad by caretaker manager Noel King. At 32 his best international days are probably behind him, and his future is very limited.
However, should Romania lose one of their two World Cup 2014 playoff games to Greece then Ireland will become a second seeded team for the qualifying for Euro 2016.
Given his form to date, Delaney could have a big say in Ireland's future.
The lack of concentration and sheer sloppiness in possession was a major aspect of Arsenal's first half play against Crystal Palace. Mesut Ozil and Per Mertesacker were the chief culprits of an uneven opening period for the Gunners.
The drop in standard was unusual for all of Arsenal's players, especially Ozil. The German international of Turkish descent has been a revelation since he joined the club from Real Madrid on transfer deadline day.
Today, however, he was not his usual self. He lost the ball in dangerous positions, gave the ball away cheaply and seemed to miss Mathieu Flamini, just as he did against Borussia Dortmund midweek.
If things had of gone differently for the 25-year-old he would have been playing in El Clasico against Barcelona. A poor performance against Palace is a far cry from the world class performance needed to beat a team like Barca.
Ozil has set a great standard and now Arsene Wenger and the Gooners expect him to maintain it.
Crystal Palace are one of the worst teams to play in the Premier League in a long, long time.
To their credit, Palace are full of honesty of endeavor and never stop working. They do, however, lack the qualities needed to stay in the league.
In the build up to the game BBC Radio 5's Danny Mills summed Palace's chances up.
If I am being honest, Crystal Palace are a Championship side.
The difference to the Championship comes when you are dealing with players' attitudes, egos and entourages. There is so much more going on with players at the high end, and maybe that got to Ian Holloway.
Tony Pulis is the early favourite to replace hm. But if I was a manager, I would think it is the impossible task to keep Palace up.
Ian Holloway parted company with the club after last week's humiliating defeat to Fulham, per the BBC. The likeable and outspoken manager looked a broken man after the loss and it was no surprise to see him leave the club by mutual consent the following day.
Striking phenom Kevin Phillips was promoted to assistant manager, per the Express, by Palace's caretaker boss Keith Millen for the unenviable task of taking on Arsenal.
In the build up to the game Arsene Wenger said he wouldn't be surprised to see Sir Alex Ferguson back in the manager's dugout within the next six months, per Sky Sports.
One thing is for sure. Even Fergie couldn't save Palace.
The personal battle between Olivier Giroud and Marouane Chamakh was supposed to be a simplified battle of the match on show.
In many ways it was.
Most pundits, analysts and fans expected the Gunners to continue their free flowing start to the season while Palace would fight until the end. Giroud was also expected to add to his four Premier League goals to date and Chamakh was expected to show Arsene Wenger exactly what he had let go.
Neither player put in a performance of note and as such they mirrored the match almost perfectly.
Giroud was off color throughout the game.
He eventually scored after a beautiful scooped pass by Aaron Ramsey set him free and he duly applied the expected finish.
Taking Giroud's goal away, Chamakh was probably the better player. The Moroccan international won the vast majority of his aerial challenges and was integral in Mikel Arteta's sending off.
Ultimately, Chamakh suffered a glorious defeat and Giroud can claim to have won the war.
The overall war, however, might be lost by Arsene Wenger. Chamakh has shown far more this season than Nicklas Bendtner and the Frenchman might rue the day he kept the Dane instead of the Palace striker.
26 October marked the 150th anniversary of the FA.
It says much about the state of English football that as the BBC's Dan Walker walked around St. George's Park with Greg Dyke, chairman of the FA, that Arsenal and Crystal Palace were playing out one of the worst matches of the season.
The Gunners were a shadow of their early season form and Palace were...well, Palace really.
Of the 22 players who started the match only four were English. Arsenal fielded just one English player in Kieran Gibbs and Palace fielded three.
The FA's vision and strategic plan for the future ultimately aims at producing more English talent.
It will take a lot of work.