No, you wouldn't have to drill it. The inlet/outlet pipe hangs on the tank, then connects to the canister below.
See link and YouTube video on right: Products
You would have to drill a hole in the back of the stand if it isn't open like mine.
It costs $100 on Amazon.com, and it comes with all the necessary media and quick disconnects (prevents water from leaking out of tubes when you disconnect hoses from canister during maintenance.
[ame="http://www.amazon.com/Eheim-ECCO-External-Canister-Filter/dp/B001EUJLPK"]Amazon.com: Eheim ECCO External Canister Filter 2232: Pet Supplies[/ame]
If you choose to get a canister (of any type) you want something rated around 30gph. Anything higher and the flow will be to great for your fish. If you decide to get another HOB filter, than you want something rated between 210-300gph.
I have also heard good things about fluval, but have no personal experiences.