Use a chassis punch. Drilling thin sheet metal is a PITA. If you want to try drilling the tile should be sandwiched between two pieces of wood, then drilled.

You can drill it with a good quality Bimetal Hole - saw, with a pilot drill.
Konrad

Clamp the piece between two pieces of wood as brickeye said but the top pieces of wood should only be next to the hole so the surface of the sheet where you are drilling can be seen as you drill thru, use a good metal cutting hole saw it will have a finer tooth count than a bimetal but costs more(A quality blade is the key here, some of the cheapo bimetal blades will not cut the SS)You will also need a good variable speed drill motor, also use plenty of cutting fluid squirted on the blade, the problem that most people run into on SS is that they try to drill it at too fast of a cutting speed, and they overheat the blade. Drill at a slow speed (some people use a start/stop method) and stop if the bit gets hot and apply plenty of cutting fluid. Caution: try your cutting fluid choice on a scrap piece to be sure it wipes off clean, some fluids will leave a stain on SS! You might want to drill a scrap piece just to get the feel of how it drills out. Oh yeah and don't forget to measure twice and drill once. Good Luck

Thanks a lot to you helpful folks for giving us more confidence. I appreciate that you took time out to explain to me in detail how to get this done. i will post back here about how things go...

-a