This is exciting and all -- and much as I would love to see a serious competitor to Facebook, I still don't know how I would convince any of my non-techie friends that they should switch to this.
Circles? Actually I think that many people like the idea of their posts are being read by as many people as possible and not just the ones with similar interests. Although it looks like a big discussion group, the news feed is really a giant personality-defining display for vain people. I saw a programmer friend post annoyance over some Android API today and I suspect that this was more than just a spontaneous exclamation -- he was communicating that he is smart (to non-techies) and that he is "cutting edge" (to fellow programmers).
Privacy? I have the feeling that most really don't care very much. But ironically, I think the privacy-thing could actually work in facebook's favor. Here is why: I use fb a lot even though I don't like their privacy policies. I trust google more than facebook. Still, it bothers me when it says "logged in" in the google bar at the top because google watches my searches. When I am on facebook I behave like I am in public. I don't hope for the best and write secret stuff anywhere. But with all the google searches I make through a day, I am giving google a lot of very personal information that I would not like anyone to see. I would hate to see something that I was searching for somehow show up in a stream for my friends to see because I accidentally clicked a +1 button or similar.
Finally, there is the fact that even if I can export my graph from fb to g+, it's worthless until my friends do the same. And I just don't see that happening before they come up with some truly ground breaking feature that will allow me to get laid with any friend I choose by clicking on their picture :-)