I'm normally doing multiples, so I use a
Souber DBB (there are cheap Chinese copies of this around but not sure how good or bad they are) to cut the lock body recess and the face plate recess, finishing the square corners with a
corner chisel and a sharp ordinary chisel. The door side drillings I often do with spade bits (Irwin - avoid the type with a threaded pilot), marked out using a combi square. This is the process using a Souber:
The one thing I would say is that it ideally needs a corded drill capable of 2500 to 3000rpm - a lot of cordless drills lack the speed and power to run the DBB in hardwood doors
If I'm doing a one-off I tend to mark out my openings (both for the lock body and the face plate) using a mortise and marking gauge plus a centre line (to guide the drill bits when starting them), drill out the waste with an appropriate size auger bit (see note below) and clear the waste out with a chisel. If the lock body is 18mm and your nearest drill is either 16mm or 19mm, go for the larger of the two rather than trying to ease-out the side of the opening with a chisel.
There is a far more detailed description in
this thread in ridiculous detail about how to do keeps - a lot to read, I'm afraid (and I'd recommend starting at page 3...). This video shows a more complex 2-hole mortise/latch keep installation, but the principle is the same (it's Dutch, but there is no sound track...):
