Interview Question for Customer Service Rep at Yahoo:

Weight displacement. So the cover does not fall into the hole no matter where it is or what is on it.

There are a few answers that would qualify as "correct", but I suspect this question won't be making the rounds much longer as this is becoming the stereotypical case example question which is meant to "see how you think".

A circular manhole cover can never fall into the hole, as a square cover could by turning it on a diagonal, for example.
Also, a worker can easily roll the cover without every having to lift it.

In addition to Adam's answers, they are also round because they will fit on the manhole regardless of which way you put them on.

The real reason manhole covers are round is because the manhole is round. It certainly wouldn't do to put a square cover on a round hole. (However, that's likely not the answer they are looking for.)

Because the manhole pipe is round.

Because if it were star-shaped it would have pointy bits that would be ouchy and tear your clothing.

In addition to Adam's observations (which contain the very best answers to this question), a round manhole cover has no sharp corners, so if for any reason it did not sit right in the manhole, and a car or truck ran over it, it would be less likely to puncture the vehicle's tire.

This was a Microsoft interview question at one point. It is round so that the cover can't fall into the hole the way a square or rectangular cover could if inserted diagnally. It's also easier to move (by rolling it).