Of all the things about Google+, one of the things that took me longest to get my head around was Circles. They just didn't intuitively make sense to me.
However. The penny has finally dropped. So, if you're not sure about how a Google+ circle works... this is as simple an explanation as I can manage!
1. Circles are a way for you to organise people you're interested in and to restrict the audience for your posts
2. Putting someone in a circle allows you to follow their public posts
4. They can, however, see what it is you shared if they happen to visit your profile
5. For it to appear in their stream, they'd have to have you in a circle too
6. Even if you add their name to one of your posts, it still won't show up in their stream (although they would get a notification about that post unless they've tweaked their settings,)
7. Remember... a circle is not a lasso that you throw around someone else to yank them into a circled conversation!