always store your props horizontal. Always always always.
The old holes you're talking about used to be drilled on the bottoms of the props to allow the moisture to escape the tips. There shouldn't be any moisture anywhere else in the wood, this will cause rot. wood+moisture+oxygen=WDO
Wood props do, however, still have a small amount of sap in them, just as any wood does. Storing the prop horiszontal keeps the sap from running to one end or the other of the prop. The direction of grain/laminations is also lengthwise, which would further facilitate the sap to run to one end or the other if it is stored vertically.
At the end of every season I used to sand my prop lightly with a medium sand paper (600 grit or finer) and apply two-three thin coats of a polyurethane or an aerosol spar urethane. Many light coats is better than a single thin coat. This will seal the prop and keep moisture from getting in.... but they don't last forever, the pores of the wood will eventually soak the urethane up as well -- this is why you do it every season. I've got a wood prop at the house that was destroyed because it sat untouched for 10 years (horizontally, hung from the ceiling, inside a garage, but no attention was paid to it)...