Also you should remember that "putting labels on people" is generally considered kind of a bad thing to do. It certainly isn't something we openly brag about in the real world ...
Personally I only have one circle and everyone goes in.
Is anyone out there putting people into circles like "Losers", "Smelly Nerds", or "Jerks" rather than "Friends", "Coworkers", or "Family"?
On the other hand, perhaps there's some use for having a circle of people unlikely to be offended by your dirty jokes or political rants, but even applying those labels doesn't seem too onerous or harmful (there's a safe default for tricky cases).
Circles are for providing context. Every time I go to facebook I see a post from someone I don't remember knowing. I look in my list and see that they are apparently a friend of mine, but from where? In Google+ this problem doesn't exist. When I add them I put them in the context that I know them by (e.g. "Close Friend", "Family", "Photography class", "WoW Friends", etc.). When I know them in multiple contexts I can put them in each one that applies (e.g. "Colleague" and "Friend" means they see everything I say to friends and everything I say to colleagues).
>It certainly isn't something we openly brag about in the real world
You haven't even used the service, have you? It's not something we brag about because no one knows what circles we have! All other users see (if we allow them to) is how many people we follow total. Basically the same info facebook shows.
>Personally I only have one circle and everyone goes in.
To each their own, but I don't even see how this is possible. You're going to put people like Robert Scoble (someone you might presumably follow but not post baby pictures to) in the same circle as your grandmother? I think if you behaved this way in real life you would end up under various restraining orders.