After an anxious moment when Darren Bent had a shot saved from close range by the feet of Steve Bywater, the Hammers opened the scoring when, following a poor clearance of a corner, Chris Powell played Luke Chadwick in, allowing him to cross for Malky Mackay who stooped to head home his first goal for the club.
Shortly afterwards, Bent headed just wide while Marlon Harewood volleyed over at the other end.
Nigel Reo-Coker had a deflected shot brilliantly saved for a corner by Kelvin Davis; from it, Ian Westlake was booked for not being 10 yards back when he intercepted the cross.
The free kick saw Etherington find Mackay, whose header was cleared off the line, and in the resulting scramble Teddy Sheringham's point blank shot was saved by Davis - prompting a handshake from the West Ham skipper.
Then, following another West Ham corner which was cleared, Tomas Repka played a ball to Etherington on the right that he only just kept in with a header.
Carl Fletcher was quickest to react as the ball rolled into the box, and as he latched onto the it, Davis brought him down.
Teddy Sheringham stepped up to take the penalty and struck the ball low and firm...and just beyond Davis' right hand post, to the delight of the 2332 travelling fans.
While West Ham were dominant, it wasn't all one way traffic and Steve Bywater made a great save from a Tommy Miller shot, parrying it over the bar; from the corner that followed, Jason De Vos' header was saved at close range by the Hammers keeper.
Ipswich started the second half brightly, with Bent always a handful; early in the half he hit a stinging shot over and was then denied by Bywater from close range at the expense of a corner.
From it, the man who had supplied the cross for that move, Pablo Counago, struck the equaliser on the turn in a crowded box.
Sheringham, Chadwick, and Harewood all had efforts go wide but Ipswich were standing firm.
They brought on Kuqi and Dinning for Counago and Magilton - roundly booed for comments he had made about Alan Pardew - while Sergei Rebrov replaced Teddy Sheringham and Hayden Mullins came on for the injured Luke Chadwick.
Rebrov's impact was almost immediate as he played Etherington in only for his cross to be glanced at close range by Harewood just beyond the advancing Calum Davenport; if either had connected cleanly it would surely have been 2-1.
There was a smile from the fans just before full time, though, when a ball boy ran on to the pitch to retrieve a second ball - with play going on around him.
Alan Pardew named an unchanged starting line-up and bench following the win over Rotherham in midweek, but Adam Nowland, who got a groin injury in the warm-up, was replaced at the last minute by Steve Lomas.
Former Hammer Kevin Horlock was welcomed back to Upton Park.