Is it ok to put a presta valve tube on a rim that is drilled out for schrader valve tubes?

Well,,, i don't see any real problem with it,,, you may want to put a washer (make sure the edges are smooth) in there to ocer the extra space with some kind of metal...

The smaller valve may allow the less-reinforced rubber away from the base of the stem to get stretched against the edge of the hole, sometimes causing a failure.

There's a simple fix, a rubber grommet that reduces the hole diameter.
http://www.lickbike.com/lickimages/1652.gif
If your lbs doesn't have them, you can get them here
http://www.lickbike.com/productpage.aspx?PART_NUM_SUB='1652-00'
or here:
http://www.thethirdhand.com/index.cgi?d=single&c=Tire/Tube&sc=Rim%20Grommet&item_id=CU-87685&id=970228416474

I have that rubber grommet but the hole is not big enough for a threaded presta valve to fit through. Each time I try, it pulls the grommet out of the rim. Plus that grommet only inserts on one wall of the rim. I'm going to give it a try w/out it.

http://www.nashbar.com/nashbar_photos/500/WM-PVS-NCL-TOP.jpg

Wheels Manufacturing Presta Savers

You know those hard-to-find little aluminum inserts that let you put a Presta valve in a Schrader rim without worrying about flats or torn off valves? Well you found them. A great emergency item for rides when all your buddy has is a presta tube. 1 pair.
Item No. » WM-PVS

http://www.nashbar.com/profile.cfm?category=600097&subcategory=60001057&brand=&sku=10513&storetype=&estoreid=&pagename=Shop%20by%20Subcat%3A%20Tube%20Accessorie s

The stem will bounce around from side to side and you'll eventually get a tear right at the stem/tube connection. They are fine for emergencies though, in my experience.

Never used one of those grommets, but for the price, why don't you just get some schrader tubes???

I have that rubber grommet but the hole is not big enough for a threaded presta valve to fit through. Each time I try, it pulls the grommet out of the rim. Plus that grommet only inserts on one wall of the rim. I'm going to give it a try w/out it.
I would say that you don't have the correct grommet. I have never found the correct size at a hardware or grommet supply - only through bike supply houses. The rim will eventually cut the tire without one. - TF

I had an old gt mountain bike that I would do that with. Never had any problems with movement as the pressure would hold the stem perfectly in place. I used presta because shraeder just looks too big and dorky.