Personally, I think I'd make my holes a bit larger. I can tell you that when I made my styrofoam incubator, I used a very scientific process and formula to come up with the right amount of ventilation. To start, I put a 1/2" hole behind where the fan was mounted. There was also a 1/2" hole in the back where the electrical cords came through. Then, I put a 1/2" hole in the center of the top, so I could stick a digital medical thermometer in the hole (dual purpose: temp control and plug all wrapped up in one slick little unit). Then, I plugged it in, and let it run for a bit, fiddling with the thermostat. It was still running a bit high. So, this is where the application of highly scientific data and training comes into play: I took a sharp pencil, and poked a hole in the sides, where ever I thought there should be a hole. So far, so good! IMO, ventilation is key. Better to have your heat source cycling more often than air stagnating in there. Sometimes, I'll just lift the lid a bit just to get some air exchange in there!
I do wish there was some formula out there to guage the amount of ventilation to match the bator size and number of eggs being incubated. Any readers with "store bought" incubators care to weigh in with this information? Size of incubator box, egg capacity, number, size, and location of ventilation holes. Also pertinent would be location of heat source, and if there is a fan or not. Perhaps we can come up with our own ventilation formula that may be a bit more specific than my pencil.