[font color=\'#000000\']1. The term 'circular' in circular polarizer referes to the polarizartion of the light that leaves the filter. It's made of two elements: a linear polarizer, followed by what is called a 'quarter-wave plate', a piece of film that recirculizes the light. The term 'circular' doesn't mean in circles, but 'unpolarized'. The filter needs to rotate because the polarizer must be aligned (or anti-aligned) with the incident polarized light.
2. The ND grad filter works because it is placed some distance in front of the lens. The incident light from above will still pass through the dark upper half of the ND grad, and the light from below passes through the clear half of the filter. In fact, if you are shooting a lens with a small lens opening you may need to move the filter away from the lens to gain the needed separation. Using a soft-edge filter on a small digital camera lens can result in very little grad effect until the filter is moved far enough from the lens so that the incident light will take different paths through the filter. If you aren't sure, get in front of the lens and look through the grad toward the aperture. Move your head up and down to see just what incident angles are passing thru which part of the grad. What you see of the aperture is what the aperture sees of you (or the scene behind your eyes).
3. I meter the scene through the properly-oriented polarizer first, then put the filter on the lens in the same orientation. Polairzers block between 1.5 and 2.5 stops of light, depending on conditions, and sometimes it's enough to know how many stops it's blocking by meteirng bare, then with the filter, and calculating the difference and applying that difference to the exposure.
4. Here's how I use an NG grad: I meter the sky and the ground to determine the exposure difference and select a grad that will compensate. Then I mount the grad, and position it, and observe if I am getting the effect I want. If not, use a softer- or harder-edged filter. Or if I am at the extreme I carry, I move my grad to a slot in the holder farther away from the lens. Most of the time I find that isn't necessary. I expose the shot at the exposure I got from the ground. By the way, I use a Cokin holder, and I carry two of them: one as is and the other with the outer two slots cut off (for use with wide-angle lenses).[/font]