I recently attended a rain barrel workshop. It cost me $40, and I was able to make my own rain barrel. Unfortunately, I don't remember the exact bit measurements to drill the hole, but when you go to purchase the parts they should say their diameter ( 3/4" or 1" maybe?)
So you need the following parts:
a barrel
a thick rubber washer
a PVC nipple that is completely threaded (male on both ends)
a PVC adapter that is male/female
a 2 way valve
fish grade sealant (not necessary but will help to stop the barrel from leaking. Fish grade to avoid nasty sealant chemicals from going onto your veggies)
Drill a hold in the bottom of the barrel. Use sandpaper or a swiss army knife or something to smooth out the edges of the hole.
The rubber washer is between the barrel and the adapter. You could put a rubber washer (also called an o-ring) on both sides if your barrel leaks and you do not want to use sealant)
2 way valve shown here.
Attach the male/male threaded adapter to the 2 way valve. Get someone to go into the barrel to add the rubber washer and male/female adapter. Tighten as much as you can.
Between the 2 way valve and the adapter shown above is another adapter. It is male on both ends, allowing the 2 pieces to be joined tightly. It looks like the one below, but without the smooth center
Try to get a barrel that has an open face lid so that you don't have to cut away the center (similar format to canning jars and their lids). Use fiberglass screen to prevent mosquitoes from using your rain barrel as a breeding ground.
If you put your rain barrel up on cinder blocks (or any other structure that can hold 500 lbs without tipping) you will get more pressure. If you do not want to raise your barrel you can attach a piece of hose to the bottom which will allow you to fill your watering can.
You can also daisy-chain your barrels at the bottom to collect more water. (Just leave the 2 way valves open between the 2 barrels. And the barrel with the hose will need two 2-way valves: one for pouring and one for hooking up to the sister barrel)
Here is the finished barrel:
