There is no super-compelling reason to switch to circular knitting needles as opposed to using double pointed needles... but there are some instances where one is more efficient than the other.
Here are double-points in action. Image from ehow.com:
And here is someone working with circulars. Image from Jimmy Beans Wool:
Both make hats and can make the knit stitch without ever purling (if you don't do the rib stitch). Both literally just keep going round and round. However, with circulars, you never have to switch needles like you do with double points - you just keep knitting and knitting on the same needle set.
With circulars, they have the normal points at the end, with a cable in the middle. The cable length can vary usually from about 16" to 60" - which is helpful depending upon whether you are making a small toddler's hat or a women's skirt. To know where the row begins, you use regular stitch markers, as you would on the double points. Images from How Stuff Works and Creative Knitting:
I personally own and love my Boye interchangeable needle set, although to be fair, I've seen quite alot of posts in this group that say they dislike the set. I've heard complaints that the connectors come off and that the cable is too stiff. For me, I just ensure the connectors are -super tightened- before I work, and then there's no problem. As far as the cable stiffness, I just run it under hot water before I start and it softens up.
With this set, you get practically every size needle, plus various cable lengths that you can hook together. Got mine @ AC Moore with a 50% coupon quite some time ago
It's much cheaper to buy this set than 30 different versions and lengths of circulars.
And, you can use circulars with regular straight knitting too (you just don't join the circle). The advantage is you can do a wide afghan in one swoop - whereas if you used regular single-point straight knitting needles, you couldn't fit all the stitches on at once. That's why I like the Boye - not only do I not have to buy 30+ different circulars, but now I don't have to buy every type of straight needle either. Very convenient.
I use my circulars for most of my knitting projects (even those that aren't in the round). And for hats, I find it a bit inefficient to use double points because I have to keep switching needles even 10 stitches or so. It's much quicker on the circulars - no switching needles ever. But there are a few times I go back to the double points. My 3-year old just took up dance class, and I'm making a pair of leg warmers with the double points, because circulars are just too big and bulky to work with. Now, there is a technique called the "magic loop" to make small objects like socks with circulars - but I still find double points to be easier in that case.
So bottom line, no super-compelling reasons to switch, but it's probably worth a try with circulars on a hat or two.
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