If the hole falls between two tile - then you can use a tile saw. Otherwise get some putty (plumbers putty) and build a little cup - 1/2" high on the tile. Fill this cup with water. Use a carbide hole saw.

Hi Geoffrey,
Thanks for the follow up and suggestion. The problem is that the tiles are mounted on the wall, so building a cup out of plumber's putty wouldn't work. Each cut will be close to centered within the tile.

A diamond hole saw bit will be your best friend for this. They are a little expensive but the best way to avoid cracking the tile. I would recommend have a second pair of hands available with a spray bottle of some sort of liquid to spray the tile and keep everything cool, also to help avoid breaking the tile (alluding to Geoffrey's post about making a pool or bath).

Thanks, Millworkman,
I think the idea of a spray bottle to keep the bit and tile cool while drilling is a great idea. I was wondering about diamond coated hole saw vs. tungsten carbide. I read somewhere that the diamond should be used on porcelain and tungsten carbide on ceramic. You feel the diamond would be better for this job, cutting ceramic?
Thanks.

That I am not certain of. The company I work for (as a PM/Estimator) usually only does glass but not tile but one of my installers does tile as well and from what I know the only thing he uses id a diamond hole saw, Maybe tungsten carbide would be better bu I do not know. The keeping it cool part is essential for either however.

The diamond hole saw worked great. I took it slow, sprayed water in the cut, and cleaned out the sludge every so often to keep the temperature cool. Only $39 and it did all 3 holes, ceramic tiles and an inch of cement wall.
Thanks!

I have a sponge  I cut the edge with half the bit. Soak the sponge and hold it to the side of the bit. It cools and cleans.