i'm planning to drill two small holes in a frame (alloy), one in head tube just above the lower headset bearing and another near the rear cable stop on the top tube, and route the cable internally. any reasons why is this not a good idea?
It is easy to overdo this; drilling holes in a frame is a perfect way of making sure that your frame warranty is no longer valid. It will also allow water into the frame in all new places, the steerer may chafe the cable..... there are lots of minor problems that might crop up.
More importantly it might weaken the frame too; I've seen quite a few head tubes crack in aluminium frames, so giving it another excuse to do so wouldn't exactly be high up on my priority list.
There are plenty of other ways of securing the cable, e.g. using helicopter tape, or winding it around the front brake cable until it is level with the top tube, then bridging across to the rear cable. If you have an exposed brake cable run on the top tube, use an external sleeve on it and tape the lighting cable to that.
If you want a neat job, you can use short lengths of heat shrink insulation to secure the lighting wires to the brake cables.
FWIW I prefer a lighting set whereby the whole shooting match can be removed from the bike in one go, wiring and all; this allows it to be modified/repaired/tested on the bench should the need arise.
cheers