If you have a solid backup strategy in place, transaction log files will be purged on a regular basis, freeing up disk space and eliminating the need for circular logging. Because the total size of the active transactions are less than the total amount of RAM on a given computer, with circular logging enabled, the system has complete recoverability with respect to hard and soft crashes. However, circular logging sacrifices the protection against media failure.
Circular logging writes log files, but after the checkpoint has been advanced, the inactive portion of the transaction logs are discarded. The discarded portion usually represents the majority of the potential log data. Since transaction log history is cyclical under these conditions, it cannot be restored. In addition, although circular logging can help conserve disk space, incremental and differential backups are not possible when it is enabled.