You make many decisions if you have a high number of friends. And you do so every time you post something. It can get hairy, and it already has for me (at only 60 friends). "Why didn't Jim comment on this yet? I posted it to my Friends circle and it's totally his kind of thing. Oh, he's in Coworkers but I forgot to put him under Friends too."

That's really my biggest problem with Circles in their current form. They're being themed as analogs to how we group people in real life, but in reality we're still network administrators in that we apply permissions to things that we only want certain groups to see. Admins have netgroups (netgroup = users and/or groups) whereas we have no form of inheritance/hierarchy/overlap to make things easy to remember.

That said - I love Circles as an interface/vocabulary paradigm more than lists/groups, and the UI is very well-executed.