I don't know why you would want to use a circle hook for tarpon. I understand that circle hooks are used to stop the fish swallowing the hook.
I have caught a lot of tarpon and have never had one swallow the hook.
I think John's post is very interesting.
The last time I fished for tarpon in the Keys my guide told me of a "new" technique for hooking tarpon. I tried it and it worked.
When the fish takes do not set the hook immediately. Loosen the drag and let the fish take almost all the line, nearly into the backing and then set the hook. The idea is the the fish does not realise that he is hooked and the hook slowly works its way into the fishes mouth. When you strike quickly the fish feels the hook and jumps and most often throws the hook.
On that occasion I was rewarded with a 130lb tarpon.
Unfortunately tarpon often take very strongly and feel the hook straight away and jump.
If the fish does not jump then I think there is a better chance of getting a good hook set.
I also agree with Vtloon idea that when you try to set the hook on a small tarpon the weight of the fish is not sufficient to be enough resistance to get a good hook set. That is largely down to good luck.
I find I tend to land proportionately more larger fish that I hook than smaller fish.