I agree with this. The key differentiator in my mind is that categorizing my friends in Circles is, Hell, almost fun. I can easily drag someone to multiple circles, or drag multiples of people into a circle, or drag multiples of people into multiple circles.

The user experience on it is just great. Yes, Facebook sort of has this functionality, but it isn't anywhere remotely close to being as usable as Circles is out of the box.