The Circle tool allows you to draw a perfect circle. Simply click and hold down the mouse, drag until you get the size circle you want, then release the mouse button.
The stroke width option allows you to specify how thick of a border you want, while the current Stroke Color will be used for the color of the circle's border.
Elements drawn with the Circle tool can be filled with either a solid color or a gradient. You can also apply a drop shadow to circle elements, as well as bevel/emboss them, or add a glow to it.