The visitors came with a game plan to pressurise the Ipswich players and it paid off with just 58 seconds on the watch when a dreadful defensive mix-up gifted Marlon Harewood a goal.
Jason De Vos underhit a back-pass, Richard Naylor and Kelvin Davis left it to each other and Harewood nipped in to rob the goalkeeper and stroke the ball into the empty net.
Ian Westlake tried a looping header from a long Jim Magilton ball over the top, but his effort went tamely straight to Stephen Bywater, before Shefki Kuqi got his head on a Darren Currie cross but flicked it wide.
Westlake had a shot blocked when a Currie corner was cleared to him on the edge of the box, before West Ham harshly had a goal disallowed on 17 minutes.
Etherington swung in a dangerous free-kick which Nigel Reo-Coker stretched to volley home, only for Malky Mackay to be adjudged offside.
The visitors had another great chance on 22 minutes when a quick Bywater throw launched a Hammers counter-attack. He found Bobby Zamora who played in Gavin Williams, but he shot tamely at Davis.
Tommy Miller fired a chance wide as Town tried to get into the game and then Currie, an ex-West Ham trainee, cut in off the wing to fire a shot straight at Bywater.
Bywater them fumbled an inswinging Currie free-kick, but West Ham were able to bundle the ball away, before Magilton shot wide from a Kuqi lay-off at the end of the half.
Straight after the break, Naylor cleared a dangerous Etherington cross before Zamora could pounce, before a good chance for Town saw a Currie cross cleared only as far as Westlake, who opted to try and find Kuqi with a pass which was cleared rather than shoot himself.
Zamora was booked for a late challenge on Fabian Wilnis and then Kuqi went into the book after a flare-up with Carl Fletcher sparked by the over-reaction of the visiting player to the striker's initial challenge.
Zamora should have made it two on 68 minutes with another fine free-kick from the superb Etherington finding him behind the defence, but he sent his header straight into the hands of Davis.
Town brought on lively teenager Dean Bowditch for the ineffective Darren Bent and he was soon in the action, playing in a dangerous low ball which Westlake couldn't quite latch on to.
Bowditch had a shot on the turn blocked after Matt Richards played in a low ball, and then Westlake fired straight at Bywater after De Vos flicked on a Richards long throw.
In what was Town's best spell of pressure in the game, Bywater made another fine save with two minutes to go when De Vos met Magilton's right-wing corner with a firm header.
However, the visitors had the last laugh in the final minute when Harewood beat Richards near the corner flag and fired in a low cross.
It was only cleared as far as sub Sergei Rebrov, and although his shot was cleared off the line by Wilnis, Etherington was there to tap home.