Using the circle allows each person's voice to occupy the room, establishing a kind of territory. Participants find it easier to speak when others listen respectfully. I do vary the format, sometimes giving a mini-lecture when there is a problem with material or a particularly complex setting. I sometimes jump to the board to record in tangible form a particularly productive or interesting line of discussion as it goes around. There are several direct effects.
Participants pay attention.
Thoughts are carefully marshaled. Contributions are concise, to the point, and mostly nonrepetitive. Ideas evolve and develop as the discussion moves around the room. Discussion tends to focus on understanding differences, stating alternatives, and constructing solutions, rather than attacking positions. This approach appeals to me because it sets me in a particular role.