Villa struggled to overcome newly promoted Reading, who had to play with ten men after Ibrahima Sonko was harshly sent off in the 33rd minute for a late tackle on Luke Moore.
O'Neill's arrival, however, has sparked a new wave of enthusiasm and he added at least an extra 10,000 on the gate.
But he faces an uphill struggle until he can improve his squad with a much needed cash injection.
Reading, on the other hand, played with enthusiasm and no small measure of skill, only to be torpedoed by the sending-off of Sonko.
At the outset it appeared that the inspirational Reading owner John Madejski's on-field team-talk had done the trick.
The Royals quickly responded to the last-minute intervention on the part of Madejski to take a fourth-minute lead through Kevin Doyle.
Unfortunately for Villa it was a case of what happened so often last season as they were caught wrong-footed and paid the penalty.
On this occasion Reading raided positively down the right, with Graeme Murty spearheading the move. Ki-Hyeon Seol gained possession and swung over a left footed cross.
Villa's defence had been dragged to the left leaving the lurking Doyle unmarked to pick his spot with a header to the left of Thomas Sorensen.
It was a lead Reading enjoyed so much that they launched a series of attacks, which fully stretched Villa's suspect defence with embarrassing ease.
The outcome could easily have been much different if Steve Sidwell had not wasted a golden opportunity by snatching at his shot and firing wide.
When Villa managed to break it was not with the conviction of Reading, although they produced one good attack which ended in Juan Pablo Angel heading in a Gareth Barry cross, only for the Colombian to be ruled offside.
Villa were chasing the game and Gabriel Agbonlahor raised their hopes when he smashed in a rising shot, only to see the ball cannon back off the post.
Minutes later Moore's pace carried him past the lumbering Sonko, who tripped the Villa youngster to immediately receive a red-card from referee Lee Mason.
Angel coolly slotted away the penalty, as Marcus Hahnemann went the wrong way, to open up the game for Villa and put Reading under ever increasing pressure.
But the worry for O'Neill was that Villa were unable to take full advantage of the visitors' predicament.
It took a substitution to spark Villa into action. Peter Whittingham replaced Jlloyd Samuel and three minutes after taking the field created the Villa breakthrough.
After moving effortlessly down the left he floated in a cross from which skipper Barry grabbed a rarely headed goal.