Agree on the teflon tape, works great for stopping the leaks. As for the bit size I'd recommend a 'step bit' to open the hole up slightly more. The step bit will also leave a cleaner edge on the pvc which should further prevent leaks.
I ordered 10 of the nipples for 10$ including shipping from ebay, took less than a week to arrive.
I ordered 10 of the nipples for 10$ including shipping from ebay, took less than a week to arrive.