I do circle time every day and disagree with Playfelt a bit about the under 2 group. I've had kids as young as 18 months sit for my entire circle time and participate to the best of their ability. It is really going to depend on your group of kids and what you're doing with them. I always encourage the kids at every age to sit on their letter mat but don't make the younger ones (under 18 months or so) stay if they are insisting on getting up to wonder.

Generally our circle time routine happens right after lunch and goes as follows...

First everyone finds their letter mat (I help those that don't know their letter) and we start with songs. We do a lot of hand motion songs because they tend to keep the kids of all ages engaged. After songs we do our letter of the month. I have the alphabet up on the wall and I start pointing to the letters and they yell STOP when I get to the letter. The kids seem to love this...lol. Then we sing our A, B, C's. Then we do our colour and shape of the month. I ask them if they remember what our colour is and then ask each child individually to find me something *insert colour here* in the room and do the same for the shapes. I usually have the shape (many of them) of the month hanging on the walls for them to find. Then we do our number of the month. I have a counting jellybean jar that I made hanging on the wall so I ask the kids if they remember what number we're learning. Then I pick a child to go up to the counting jar and put X amount of jellybeans in the jar and we all count with them and then we usually sing a counting song. After counting we dress my weather frog for whatever weather it is outside and then it's story time. I read them a story or 2 depending on how long the story is and then it's nap time after that.