While nine-time winners Real and seven-time champions Milan were trading novice mistakes, including the howler that let in Raul to equal Gerd Mueller's European goalscoring record, the other tournament heavyweights were looking coolly efficient.
Manchester United made light of a plastic pitch at the Luzhniki stadium, the scene of their 2008 final triumph, to make it maximum points from three Group B matches with a 1-0 win over CSKA Moscow, Antonio Valencia swooping late for the only goal.
Chelsea extended their perfect record in Group D by swatting aside Atletico Madrid 4-0, Salomon Kalou putting a terrible early miss behind him to score the first two, and Juventus revived their Group A hopes with a 1-0 win over Maccabi Haifa.
Tuesday's matches had featured a string of last-gasp goals and shock results, and there was more of the same in Group C in Madrid, where an AC Milan side struggling in eighth place in Serie A handed Real an embarrassing defeat.
Real's Santiago Bernabeu stadium is hosting this season's final and after the club spent 250 million euros on players before the current campaign, coach Manuel Pellegrini is under huge pressure to secure a golden ticket for the Madrid party.
Real, missing the most expensive of those recruits in Cristiano Ronaldo, looked set for their third win when Raul pounced on Dida's mistake to make it 1-0 and equal Mueller's record of 66 goals in the main European club competitions.
The game turned when Andrea Pirlo embarrassed Iker Casillas at his near post in the 62nd minute, and the Real ‘keeper, normally among the most reliable of performers, gifted Brazilian striker Alexandre Pato Milan's second four minutes later.
Royston Drenthe equalised for Real but with two minutes remaining, Pato arrived at the back post to volley the winner.
Milan and Real have six points apiece in Group C, with Olympique Marseille and Zurich both on three after the French side won their game 1-0 in Switzerland, thanks to a second-half goal from Argentina defender Gabriel Heinze.
Manchester United are sitting pretty in Group B with maximum points, followed by VfL Wolfsburg on four after they shared a goalless home draw with Besiktas. CSKA have three points and Besiktas one.
Porto striker Hulk gave a suitably heroic performance in Group D, scoring twice to haul his side back from a goal down and secure a 2-1 home win over APOEL Nicosia. While Chelsea lead on nine, Porto are second on six and APOEL and Atletico trail on a point apiece.
Juventus got their first win in Group A, thanks to Giorgio Chiellini's goal against Maccabi Haifa. That group is tight after Girondins Bordeaux came from behind to win 2-1 at home to Bayern Munich.
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