Gamesalad has a circle collision option. There must be a way to do it. Also it is needed for any top down games with a player and solid walls(like my game Maze Manor ). If the player does not have a circle collision shape it will get stuck facing the wall at what ever angle you touched the wall and will not rotate until you back off the wall. This is a problem say if you walk up to a wall then go to the right the player will walk right while facing up. I've corrected alot of this with placing a specific collision shape on my player, but it still happens at certain angles.
I see, this is a real problem.
I was trying to reproduce a top-down RPG, like zelda, but stopped after the Z ordering problem. Anyway, doing a octagonal polygon will decrease drastically the performance of you game, this is what I concluded after trying.
Oh, and to setup the lines, I saved the project on a folder and written the polygon code inside the XML, because setting it visually give you a bad triangulation.