If you should ever have the need to cut perfectly circular holes in soft materials; balsa, basswood, foam, I highly recommend these Gaskin Softbore cutters. They are really nicely fabricated and will last for years. The cutters can be sharpened as needed, but unless you are cutting hard woods or forget to put a piece of scrap under the cut, they are very, very reliable. The finished cut is perfectly circular and if you run the tool through slowly will not require sanding. They come in a variety of diameters from 1/4" to 1".

http://www.rjrcooltools.com/gaskin.cfm