The magic circle is new to me as of March 2008. It is a simple loop with the starting stitches crocheted over the thread. It is a popular start with the amigurumi crochet. When the round is complete, it will close nice and tight. I love using the magic circle start variation. I have been using the magic circle where it calls for a chain since I learned the method. What I like about the magic circle is you get a nice and tight closure with the beginning round. It does get very full with more than 16 stitches in the beginning round. If you are wanting an opening at the beginning round, then by all means, use a chain instead. It is important to remember to make several secure knots with your magic circle once you have completed your project or it will come apart.
The chain on the other hand is a little heavier. You adjust your opening size with the number of chains in the beginning of your loop. You slip stitch the end of your chain to the beginning chain, forming the loop to hold your stitches. This works well if you are starting with a lot of double crochet or with a granny square that will be washed a lot. The decision is yours.