my roommate and I invested in the fiskars circle cutter...there's several stencils to use with the cutter and it's very easy to use. The cutter itself is around $15 and the stencils range from $5-$15. I bought the large circle stencils..I'm so glad I did because we use them ALL THE TIME. It's one of the best tools I bought.
I use a template, usually a piece of SB paper I picked up for this reason or I cut the circle/scalloped circle from various cricut cartridges. Sometimes circle chipbopard works great too and you can save some just for that reason because it comes in so many different sizes.
I have this nifty circle template from Hot Off The Press,the circles range from 2" diameter to the biggest circle of 11 1/2". I found it at www.paperwishes.com for $5.99. I've used it a few times and it works great!