We present a combination of theory and experiment designed to elucidate the properties of gold nanoshells. Wet chemistry methods are used to prepare the nanoshells, and transmission electron microscopy (TEM) analysis is used to characterize the shell structure, demonstrating the presence of pinholes in the shells. Both Mie theory and the discrete dipole approximation (a numerical method) are used to characterize the electrodynamics of the shell structures, including both perfect and pinhole defected shells. The calculations show that 2-5 nm pinholes have only a small effect on the extinction spectra; however, they lead to local electric fields that are enhanced by a factor of 3-4 close to the plasmon maximum. This makes metal nanoshells (with holes) attractive materials for surface enhanced Raman spectroscopy applications.