You will also need a piece of fabric to trim the keyhole.
They key to keyholes (haha, get it?) is very stretchy trim fabric. The stretchier the fabric, the better your keyhole will turn out. If you've tried keyholes before and the fabric bunched up around it, your band of fabric around the edge probably wasn't stretchy enough.
For this top, I'm using a piece of rib knit. This stuff is PERFECT for keyholes, because it's insanely stretchy and elastic- it doesn't lose it's shape when stretched a lot. It's also called ribbing, baby rib, etc. It's the same stuff they use for the cuffs of sweatshirts.
So back to the keyhole- you will want a piece of trim fabric that is equal in length to the circumference of your keyhole. You can estimate on this a little, but always err on the side of longer for the trim. We'll say my keyhole and my trim fabric were both 14". Your trim fabric should also be double the width you want it to be when it's finished. I want 1/2" of trim, so my piece of fabric is 1" wide (plus a seam allowance!).
You can use lace or some sort of ruffly stuff around a keyhole, but it's tricky. You'll probably want something that is elastic in the middle with ruffles on both sides. In this case, you won't need to worry about the width.