Palmer was lucky to be in the competition after a 17th place in the 200 metres freestyle from the heats. But a withdrawal let him back in and in a magnificent race, Palmer set a British record time of 1 minute 48.01 seconds. It is a time which automatically qualifies him for next year's Sydney Olympics.
Racing without the full body suit he wore for his victory in the 400m on Monday, Palmer was ecstatic with his performance. "I just went for it from the start and I'm really pleased with the time. I knew I was going to have to go out for it and sometimes you just have to ride your luck, don't you?"
Gold was won for the fourth time this week by the Dutchman Pieter Van den Hoogenband. Under world-record pace at 50m and 150m, a long week at last caught up with him in the final stages. With his sublime stroke falling apart and Palmer closing, Van den Hoogenband held on to finish in a time of 1:47.09. The Dutchman is chasing an unprecedented seven golds at these championships.
Baker, from Sheffield, also won silver in the 50m breaststroke. Leading for 48 of the 50 metres, she was overhauled in the penultimate stroke by Hungary's Agnes Kovacs. Rushing the stroke at the start, Baker finally found her rhythm at the halfway point. But that early hesitancy cost her at the finish.
"I didn't get the start I wanted and the stroke wasn't quite together," Baker said. "At 25m I said 'slow down' because I was nervous from the start. But at the end, it just wasn't enough."
In a good night for the Netherlands, Inge De Bruijn set a European mark of 58.49 to win the 100m butterfly.
Disappointed with his fourth place in the 200m butterfly, James Hickman recaptured his form yesterday in the semi-finals of the 100m. Hickman is second into today's final, behind the Swede Lars Frolander.
Karen Pickering, too, was back to her best last night in the 200m freestyle, qualifying in sixth place for a fiercely competitive final later today.
The Commonwealth champion, 17-year-old Katy Sexton from Portsmouth, finished sixth in the 100m backstroke in a time of 1:03.07, just 0.3 outside the British record.
Earlier yesterday Palmer was dragged into the kind of row he wanted to avoid after wearing the full body suit, made by Adidas, to his gold medal ceremony on Monday. The British team is sponsored by Speedo, who reminded the British managers out here of their contractual obligations.
The body suits are made to measure for each swimmer. They are less resistant in water than skin and further help to increase speed by gripping the muscles. This keeps the muscles relaxed and can reduce energy lost through muscle vibration. The result reduces the onset of fatigue and may help to increase speed.
However, Speedo has been guilty of exactly the same practice in the past. In the 1988 Seoul Olympics, Adrian Moorhouse won gold in the 100m breaststroke and chose to wear Speedo instead of the Arena suits with which the team was supplied. That was the occasion when Moorhouse won the final by just 0.01sec, the smallest margin of victory in the sport.
It would have been unfortunate if Speedo were to deny British swimming another medal last night simply by demanding that swimmers now abide by the rules they have encouraged others to break.
Speaking yesterday, Moorhouse said, "It's all performance materials. I believe you should wear whatever hat, goggles and trunks you feel comfortable performing in."
With corporate giants Nike and Adidas recently entering the swimwear market, Speedo appears to be suffering from the same competitive nerves that can lead the swimmers they support to poor performances.
On issues of essential kit like running shoes and swimsuits, British swimming needs to follow the lead of athletics and ensure that from now on, swimmers can wear any suit they choose.
There was another bronze yesterday for Britain's divers. Mark Shipman and Toni Ali took bronze in the 3m springboard synchronised diving.
Leading the event, they dropped the fourth dive of the series and were unable to recover. "It was very close," Ali said afterwards. "We made a few mistakes that you cannot do in tight competition. One poor dive cost us the gold, but we are happy to win a medal."
Results, Digest, page 29