The tap drill size for 1/8 npt is a "Q". You would then tap it with a 1/8npt tap. "Q" tap size in decimals is .3320 inches. The npt taps are different from standard taps in that npt taps are tapered. Hope this helps.
Thanks guys. Just came back from Orchard Supply, the packaging on the 1/8 NPT tap actually tells you which drill size to use...11/32. Now, I'll just have to find a shop that can do TIG welding.