After a little play around with it, there are a few improvements I think they ought to make.
It wouldn't hurt to replicate Facebook's ability to list your favorite films, books, etc. 'Sparks' let you identify your interests, but don't offer much detail and aren't very useful for their stated purpose of finding relevant web results. There's not much to be gained from a broad Google search of the word 'videogames'.
More importantly, the privacy options are not as straightforward and all encompassing as I would hope, especially considering the flack that Facebook has received over this. When I uploaded my profile picture, a record of this action was automatically made into a 'public' post, which I then couldn't change to being only visible to certain circles or whatever. So you have control over privacy before making a manual post, but there's no way of setting a default option for posts that are made by the system. That breeds caution and hesitation in my book. It may not matter with profile pictures, but who knows what else you won't be able to reel in from public view without deleting it altogether?
In general though I do like the circles idea, as it makes it much easier and more intuitive to separate your contacts into different social... circles. It means I can actually add people like family members who I wouldn't ordinarily want to read my statuses and comments, and I can post things aimed at one subset of friends (wrestling fans for example) without alienating everyone else. As Hazzy said, this is still possible on Facebook but much less ingrained in the user experience.