Main things I do to avoid circular xrefs are;
1. Keep the main building drawing / model in a single main file as a single drawing / model.
2. I primarily only do SFR, so I use the single file method for all my plans with self xrefs and then xref in from a couple main drawings for things like my borders and typical notes & details.
3. If using multiple drawings for a larger multifamily, commercial or industrial project, I create a new xref for everything, I never use nesting. If I need something that could be nested, I just copy and paste the xref from the other drawing into my current drawing. It just keeps things simpler and the way Datacad works with it's memory usage for xrefs it works well and keeps the files moving quick for things like snapping and moving around. Forethought on how the xrefs are to be used and trying to keep things simple and straight forward helps a lot. Doing the single xref method helps to avoid confusion down the road when dependencies for nesting that stack on each other can be a bear to repath or redefine later if the project needs change. You can just open the drawing and repath/redefine as needed.
4. I normally only use xrefs to reference the building / model. I don't reference things like text and dimensions unless it for a enlarged plan which is just that, only enlarged. Using the idea that information should ideally only be located in the drawings once with out duplicated information being repeated, I don't xref plan notes, keynotes and dimensions. Trying to work around xrefs reusing the same text info over, tends to make things more complicated unless it's very straight forward.
There are other things that can be done for circular issues, but keeping things simple and really getting familiar with how xrefs work will help you understand how they should and should not be used for your specific work. Play with them and use them more and it will start to click. Just don't wait to try to figure them out for that project that was due yesterday.
Do some simple practice drawings and setups and try to work things out without the overhead bulk of an actual project or a deadline.
Doing these things I can't recall the last time I have seen a circular xref message in one of my drawings, been years probably. Hope this helps. If you have specific questions come back and let us know, we'll get ya squared away.