As David stated you can get different sized hole cutters, or you can use a paddle bit on hard woods, or an adjustable cutter that uses an arm with a cutting blade and a center pilot bit. Most of these really should be used with a drill press, both for accuracy and safety. Check Rockler.com for really nice tools, but look at Sears for more affordable versions. Always, I repeat ALWAYS clamp your piece very well when drilling holes - the bits can really bite and put you in a world of hurt in the blink of an eye if you are not paying attention to what you are doing.
Don't get me wrong, it's not that dangerous if you just pay attention. I've made a number of lens boards, and need to make two more right now actually! It's a hell of a lot cheaper than buying pre-made boards, and you can choose the wood and the finish to match your camera when you do it yourself.
- Randy