Both goalkeepers were called into action in the first half with Crystal Palace's Carlo Nash clearing a Pyotr Kachura shot at goal, and Simon Tracey intercepting a cross from Bruce Dyer.
With a minute remaining, Dougie Freedman scored with a left-footed strike from 25 yards (23 m) to double the lead, but Jamie Smith pulled one back for Wolves almost immediately.
Mark Atkins put the home side ahead after half an hour with a low shot through Carlo Nash's legs in the Palace goal.
The home side took the lead in the 40th minute when Jan Åge Fjørtoft who held off Chris Swailes to shoot past Richard Wright in the Ipswich goal.
Pyotr Kachura put the visitors ahead on eight minutes with a rising shot which hit the underside of the bar before being adjudged to have crossed the goal line.
[9] Sheffield United were making their first appearance in a play-off final,[9] and were aiming to return to the top tier of English football after being relegated from the Premier League in the 1993–94 season.
"[17] Ray Houghton, the Crystal Palace midfielder, had suffered defeat in the previous season's play-off final but remained confident: "Obviously Sheffield United are a good side, you have to be to get this close to the Premiership.
[19] Sheffield United were expecting to give a late fitness test to Alan Kelly who had aggravated a knee injury during the play-off semi-final against Ipswich.
[19] Two minutes in, Dyer was fouled deep in Sheffield United territory by Dane Whitehouse and although the resulting free kick from Simon Rodger found Shipperley, his header was cleared.
[31] Sheffield United made their first substitution of the match in the 26th minute: Kachura was replaced by Gareth Taylor, whose first contribution was to direct a looping header straight to Nash.
[33] Seven minutes later, Shipperley received the first yellow card of the game after fouling David White; the resulting free kick was cleared over his own bar by Linighan.
[35] With a minute of regular time remaining in the first half, Rodger's pass into the box was picked up by Dyer, but he was tackled by Carl Tiler while shooting and the ball was cleared across the Sheffield United penalty area and out for a throw-in.
[36] Hutchison then fell awkwardly after an aerial challenge with Holdsworth, injuring his right shoulder, and was stretchered off the pitch in visible pain;[37] Lee Sandford came on to replace him.
[42] Muscat's 54th minute cross from the right wing was controlled by Dyer on his chest but his shot along the ground was weak and easily gathered by Tracey in the Sheffield United goal.
[45] A minute later, Taylor's headed pass from the edge of the Sheffield United box found Fjørtoft whose shot went just wide of the right-hand post of Crystal Palace's goal.
[48] Two minutes later, he was brought down by Dean Gordon on the edge of the Crystal Palace penalty area,[49] but the resulting free kick from Mitch Ward to the far post came to nothing.
[50] With 15 minutes of regular time remaining, Nilsen beat Muscat on the left wing to send in a high cross for Taylor but it was cleared by the Crystal Palace defenders.
[53] With seven minutes of the match left, Muscat crossed from the right-hand side of the Sheffield penalty area and the ball was flicked on by Gordon, but Dyer's bicycle kick went wide of the left-hand post.
[57] With less than a minute of regular time remaining, Gordon's strike from just outside the Sheffield United penalty area was deflected out of play by Tiler, resulting in a corner.
Rodger floated in a cross which was cleared by Tiler, falling to Hopkin who controlled it before striking a right-footed curling shot from around 25 yards (23 m) into the top-right corner of the Sheffield United goal.
[22] Hopkin recalled the previous year's play-off final in which Crystal Palace had lost to Leicester because of a last-minute goal, saying: "I know how Sheffield United feel ...