For an 1-1/8" hole, whether wood or metal control panel, I'd recommend an 1-1/8" holesaw. As far as the better way to go, it all depends on how steady your hand is with a drill. If you've got access to a drill press, I'd go with it. Wood's cheap, so if you don't want to plunk down money on even a small tabletop drill press for only a handful of holes, you might as well practice on some scraps of the same type that you're going to be cutting holes in.