Roundabouts really serve two main functions. The first is as a traffic calming device. Because the straight length of the road (in all directions) is broken by a curve, it forces you to slow down. Second, because of the road rules regarding giving-way, it may require you to stop altogether. Secondly, it acts as a traffic control device. By their very design they make it necessary for a driver to stop for any vehicle on their driver's side - often those already on the roundabout, it has a way of controlling the flow of traffic. They can be useful on medium traffic roads, but because they are technically 'uncontrolled' intersections, you can get times where traffic is held up in one direction due to a heavy stream of vehicles coming on from the 'give-way' direction of the halted cars. Benefits of roundabouts include being able to make across-the-traffic turns, having cars going in multiple directions at once without risking collision, not having to wait at lights. Drawbacks include the fact that half the people I see don't know how to use them... they are an uncontrolled intersection so they can still become quagmired, and the fact that you have to be alert for traffic crossing your path, probably more so than a regular intersection.

Speaking from an enviormental perspective, a roundabouts purpose is to reduce the carbon combustion from cars. This is becasue cars don't idle, and therefore do not let out useless Co2 into the air.