Diego Forlan scored the decisive spot-kick after Mikael Silvestre had nodded the Premiership champions into the lead and Thierry Henry's long-range free-kick ensured a stalemate in normal time.
Arsenal also finished the encounter with ten men when substitute Francis Jeffers was stupidly sent off in the second half for mindlessly kicking out at Phil Neville.
The air of community spirit lasted all of 22 seconds as Neville was booked for a rash challenge on Patrick Vieira and was swiftly followed into referee Steve Bennett's notebook by Ashley Cole after a mistimed tackle on Nicky Butt.
After the tempestuous opening exchanges, the contest settled down to a sensibly sedate pace given the sweltering conditions and both sides scored with their first menacing efforts on target.
On 15 minutes United drew first blood as the FA Cup winners were guilty of ball-watching as Ryan Giggs's corner was flicked on by Roy Keane for the unmarked Silvestre to steal in at the far post and head simply home.
The Gunners were quickly level after Henry's dipping 30-yard free-kick arced low into the corner, beating the despairing dive of Tim Howard with the United States international slow to react.
Moments later, Gunners full back Cole was fortunate to stay on the pitch after escaping with a warning from Bennett for kicking out at Ole Gunnar Solskjaer as the duo tangled for the ball.
The Red Devils should have restored their advantage just past the half-hour mark but were denied by the woodwork. Neville's cross was glanced on to the post by Giggs and Ruud van Nistelrooy could only head the rebound on to the crossbar.
Just before the interval, a raking pass to the right flank found Solskjaer running free for the umpteenth time in the half and the Norwegian's powerful volley was pushed around the post by Jens Lehmann, although a goal kick was bizarrely given.
The tempo was raised a notch after the interval with van Nistelrooy having a penalty shout rightly waved away and substitute Robert Pires getting his attempted chip all wrong as he broke through the United rearguard.
Arsenal enjoyed the brighter moments of possession in the second period but failed to create any worthwhile opportunities while Red Devils substitute Eric Djemba-Djemba volleyed narrowly over.
But the Gunners' disciplinary woes came back to haunt them on 73 minutes when substitute Jeffers was sent off for needlessly kicking out at Neville right under the nose of Bennett.
In the light of Jeffers's dismissal, Gunners team-mate Sol Campbell can count himself fortunate not to see a red card after lashing out at Djemba-Djemba after the Cameroon international followed through with his foot after a stinging drive.
In the shoot-out, Paul Scholes, Rio Ferdinand, Solskjaer and Forlan scored for The Red Devils with van Nistelrooy uncharacteristically having his penalty saved by Jens Lehmann while Edu, Sylvain Wiltord and Lauren netted for Arsenal but Giovanni van Bronckhorst's penalty was saved by Howard with the American then keeping out Pires's spot-kick to hand the champions the first piece of silverware of the domestic season.
