Graham,
You use the drill to drive the skateboard wheel and some other tool, like a file, to cut the groove while the wheel spins. Picture this: A wheel with a bolt through the hole in the middle and the bolt in the chuck of the drill as you'd put a drill bit in it. Now, pull the trigger, the wheel spins and you file a groove in the surface of the wheel deep and wide enough to hold the chain. You might find it helpful to carefully clamp the drill in a vise to hold it steady while you work...unless you're one of those folks with three hands. You'll need to push the bearings out of the wheel, not hard, they're just lightly pressed in, then find a bolt that you can put through long enough so you can tighten it in the drill chuck. Obviously, you'll need a nut on that bolt to tighten the wheel to keep it from turning on the bolt. Sure hope this helps. If all else fails you might check with a local machine shop. They might cut the groove for you and not rob you...if you ask nice and show them your bike.