(I've been enjoying popping over to your blog and reading everyones' entries. I loved the pic of your sock with two colours - VERY nice. And those tulips!!!).
I've seen that magic loop pdf and it scared me. To me it looks like you may as well use two circs if you are going to get another needle involved in addition to the circular. But then again, I shouldn't judge until I've tried it.
I've knit one sock magic loop and I really didn't enjoy it much. I made myself do the whole sock to see if I would enjoy it by the end, but I didn't. I don't know why! I just thought "Well, if I'm going to just knit one sock, I may as well use dpns anyway". So the idea of using a bigger circ and an additional needle to do two socks at the same time "magic loop" is not for me.
As for knitting with two circs, yes, there are disadvantages like you found with that magic loop method:
1) Yes, the yarn gets tangled A LOT. When I first started out it felt like I spent so much time mucking about with the yarn and trying to keep it untangled. This is very annoying, and I can see how it would put some people off this method.
2) It did seem to take me longer to knit this pair if socks than usual on dpns. I put that down to:
(i) the constant mucking about with the yarn;
(ii) the fact that both my circs are the same length and thus look exactly the same. This meant I really had to concentrate on picking up the right needle everytime I turned the work to do the next row of the alternate sock. Everytime you have to stop and think which needle you're supposed to use, that's a waste of knitting time to me. With dpns you just cast on and go for it.
As clsimmons suggested, using 2 different coloured circs of the same diameter will help immensely with that problem. You have to have a way of visually differentiating one circ from the other (in the tute, Sharon uses a stitch marker I think). I couldn't find different coloured circs, but I just won a small lot of circs from an ebay.de auction and there are a pair of circs which are 3mm (US # 3) in diameter but have different length cords and a pair of 3.5mm (US # 4) needles with different length cords, so I am hoping to try these out and see if the different length cords will be a better visual que as to which needle to use next. If that fails maybe I'll paint a small stripe in one needle with household paint or something desperate like that!
(iii) Finally, I was using 2mm circs (US size 0). Usually I use 3mm dpns (US # 3) for socks. I have never had or used needles that small!!! I really like the final knit fabric you get from the smaller size needles, but it takes me longer to knit with the small needles. So once again, I can't wait to get the slightly larger diameter needles to see what will happen with those. Will it be easier or just the same?! I will report back to this thread when I finally get my needles and get started.
All in all, the only payoff with 2 circs method is that you get 2 socks instantly at the end. And that was why I used this method and why I will use it again despite the yarn problems and the time taken. I am just really BAD with procrastinating after the first sock is knit and this method is a good solution for me personally. If you're a sock knitter who doesn't suffer "second sock syndrome", don't think twice about abandoning your dpns.