I'll second the diamond core bits. My preferred method as well.
However, if you don't want to spend the $ for the core bits, you can get amazing results using some plumbing pipe and powdered abrasive. Works best in a drill press or using an accessory stand, of course. Essentially, you're making your own core bit and instead of the abrasive being brazed on, the bit sits in a small puddle of slurry and uses that abrasive. I found this trick worked great when I was helping a friend with a project. Needed to drill 1/4" holes in 7500 1" ceramic tiles that were being made into a chandelier.
Step 1 Copper pipe, same size as the desired hole. Cut one end flat, then take a triangle file and make a few teeth on the end. Chuck in drill press.
step 2 Using clay, caulk, plumbers putty, etc, form a small dam around the bit.
step 3 slurry made from sandblasters garnet and mineral oil is put in the hole.
step 4 drill at slow speed, light pressure. push down lightly, then back off, repeat. the push/back off cycle is basically there to let the slurry flow back under the edge of the pipe.
The teeth aren't really necessary, I just find that I get a little bit better start on the hole with them. They will get worn away, and the piece of pipe will get worn away as well. The pipe does wear fairly slow, probably because the soft copper "grabs" the abrasive grains, but I find I lose about 1/2" of copper for every 1" of hole. Better than doing the same drilling with glass tube, that wears at about 1:1.
We picked the pipe method for the tiles because there were so darn many holes to drill. We also built a clamping jig with sides to hold the slurry, so all the drill op had to do was put the tile in the box and toggle the clamp.