In the Blender reference manual page "Subdivision Surface Modifier", in the "Combination" section, there's a file called WoodBlock.blend that apparently shows that you can use the subsurf modifier only to make a hole in a mesh. Can it be done with only a subsurf modifier? I tried to do it myself using my own mesh and with mean creases, but it's not turning out as I expected.
The edges of the hole I made aren't round like the ends of the mesh are (and like they are in Woodblock.blend).
I see that there's a similar question to this one, but I don't know if that person used a boolean modifier to make the hole itself or used a subsurf modifier.