U.S. roundabout design has evolved significantly since the Federal Highway Administration published design guidelines a few years ago. The so-called "modern roundabout" designs apply experiences from other countries and a growing amount of empirical research data.
Several state DOT's, notably New York, have further developed both the geometric design standards and the evaluation tools that help the highway engineers predict how they will work. Software simulation programs are also starting to catch up to what is available for traditional intersections, adding to the design certainty.
Done right, they are a big improvement from the old-fashioned traffic circles with a large diameter and a relatively high circulation speed. We've all seen those legacy intersections - they tend to have a history as a place for a statue of the town war hero. Then traffic grows and grows, but nobody wants to change things up to a better design.
The circles on neighborhood streets are almost always used as channelizing and traffic calming devices, not as an alternative to a signal. They aren't true roundabouts.
As a roadway engineer, I've got mixed feelings about their use. Safety - primarily the swapping of right-angle collisions for low-speed sideswipes - is the biggest advantage of roundabouts. But at major arterial intersections in urban areas, there's a real challenge in getting the additional right-of-way and driveway restrictions needed to make the approaches and departures work correctly.
For the right application, they are just great.