when i do circular fillets what i generally do is make sure that normals are facing the right direction, since the fillet can go either 4 ways and may not produce the results you want.

check that the normals are facing the direction you want the fillet, (display->nurb components-> normals (shading mode) this needs to be done for both the objects your trying to fillet, if the normals are in the wrong position then you can reverse it (edit nurbs->reverse surface direction)

be careful to not set the radius of the fillet too high as it may take a longgg time for the computer to caculate it. best to start low like around 0.25 and then increase it gradually until you get the effect you need.

this is what i generally take note of when i do circular fillets, most of the time it works out fine, but on the odd occasions have to play around with the attributes.