I'm wanting to mount rails to my pap m92 wood handguard one on the side and one on the bottom. How would you guys do this?

I would probably use Magpul polymer rails with their backing nuts.  If you need longer screws just get them at the hardware store.

This is exactly what I've thought about doing on a wood shotgun grip.

Yeah, if you need a rail on bottom, you probably plan to use a grip on there, right?  I wouldn't trust drilled wood handguards with anything that is going to be twisted/pulled on.  A small rail on the side for a flashlight might be fine.  But I would just go with a railed handguard like dryflash3 said if I needed rails on a side and bottom.

Unless you really want wood handguards with rails, I would suggest selling your handguards for the ~$50 they sell for, and put that towards something like an MI railed handguard.

If you're set on doing it, I would suggest carefully drilling a couple small holes only barely large enough to put a machine screw through, then shaping a washer fit the inside contour of the handguard, and using a locknut to secure it. You may have clearance issues with the barrel, so you might need to use a low profile nut with loctite. You run the risk of cracking or splitting your handguards doing this, though. Hence my first suggestion.

Threaded inserts in the wood.

Another vote for not trusting drilled wooded handgaurds and a vert grip

I have a bottom railed M92 with the wood hand guards. What I did was to cut a flat spot using a mill, big enough as to allow the rail to mount flush. Drilled through and used the threaded inserts to secure. Mounts up plenty strong. https://www.youtube.com/watch?v=GNJ0g7iGbIA