Malky Mackay's side had not played in front of their home fans since Boxing Day thanks to the cold weather but were good value for the victory against a dreadful United side which ended a six-game winless streak.
Watford handed a debut to Martin Taylor after he signed on a free transfer from Birmingham while United had deadline-day signing Nyron Nosworthy in their starting XI alongside former Hornets favourite Henderson.
Henderson was a key part of the side which won promotion to the Barclays Premier League under Adrian Boothroyd in 2006 and immediately caused havoc on his return.
The striker beat Taylor to the ball and his header fell at the feet of Stephen Quinn, but the Blades midfielder could not keep his shot down.
Watford goalkeeper Scott Loach attracted interest from Tottenham on deadline day and showed why with an instinctive save in the 20th minute.
James Harper swung in a dangerous ball from the right and Morgan powered a header goalwards from no more than five yards only to see Loach somehow palm the ball to safety.
Opposing goalkeeper Mark Bunn was then also at his best to acrobatically turn a Helguson flick over the crossbar as both sides struggled to get the ball down.
Helguson then again went close with a header from a corner before Cleverley came within inches of an opener for the hosts.
The on-loan Manchester United man showed his pedigree with a fine free-kick which beat Bunn but cannoned away off the post.
However Cleverley did have the Hornets ahead with a scruffy goal in the 39th minute. Taylor launched a long ball forward to the edge of the penalty area and as Henderson, Morgan and Derek Geary all let the ball bounce Cleverley nipped in to head over the advancing Bunn and into the net.
Cleverley took a whack from Bunn in the process but was quickly back on his feet as the Hornets led at the break.
United boss Kevin Blackwell brought on Mark Yeates at half-time in a bid for more attacking flair but it was the home side who nearly scored straight from kick-off.
Bunn fluffed a kick straight to Helguson but recovered marvellously to tip his shot around the post at full stretch.
The Icelandic striker really should have scored but did double the lead in the 55th minute thanks to more ponderous defending.
John Eustace helped a ball forward and the visiting back four were again slow to react as Helguson ran past them to control the ball ahead of Bunn and clip in a clinical finish.
Henderson received a standing ovation from the home fans as he was replaced with 20 minutes remaining before Cowie made it 3-0 in the 74th minute.
The Scot sent in a devilish delivery from close to the left touchline and despite three players attacking the ball nobody made a connection and the ball flew straight into the net.