What is that circle that replaces the WIFI icon on my iPhone 2G sometimes? It's probably the phone's way of showing me there is no WIFI connection. Is that it? Probably not since that would probably be a "no icon" thing. 

Anyway, couldn't find it in the user's manual so here you go... question asked. 

Thx
The circle indicates that you're on the cellular GPRS data network. The fact that it's visible also means that you don't have a wifi connection: