The game marks the start of a busy festive period of games with fixtures on Boxing Day, Saturday 29th and New Year's Day for most clubs.
Both the Hornets and the Reds are among a group of Championship clubs whose seasons could go either way as they lie just outside the play-off places.
Watford boss Gianfranco Zola told the Watford Observer: "Forest are going to represent a difficult game for us that's for sure.
"They have a lot of quality, especially up front."
Opposite number Sean O'Driscoll sees his selection options increasing just in time for a hectic run of matches as Simon Cox is fit and Jermaine Jenas has returned to training.
"Picking the team is the biggest headache," O'Driscoll told the Nottingham Evening Post.
Check out the Reds' record On This Day by clicking the link below.
http://www.nottinghamforest-mad.co.uk/on_this_day/22/dec/nottingham_forest/index.shtml