As Bob Bolton points out, the idea of circular breathing is to fill your cheeks with air and then, using the muscles in your cheeks, squeeze out the air while your breathe in through the nose. However, one thing is the theory, another is practice.

When I started playing the didge I got a tip from a friend of mine. Go down to McDonalds and get a straw. Put the straw into a glass of water and practise the tecnique by blowing bubles. When you can keep up a steady strean of bubles while breathing through the nose, you've got the technique right. Then start using the technique on the didge. Step one takes about a day to learn, but using the technique on the didge takes a bit longer.

Good luck, Jacob