If anybody's listened to Metallica's "Master of puppets" that's the prime example of Circular picking:
the riff for the chorus is:
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------2----3-----4-----3-----3-3--------------------------------0-1--0-1---0-1---0-1--0-1---------------------------------
Repeated with chords on the end.
You hold the pick like a pen, and go in a circular motion "up, down" on the bottom E, then "down" on the A and again, and again... when you get it up to speed, if you make a circular motion with you fingers, it helps greatly with the circular picking. This is circular picking.
Sorry - a bit confusing, but I hope it helps.