I've seen this optical illusion once before, but never quite as clearly. Plus the commentary really helps explain what's happening.

So, is it simply our expectation that faces are convex rather than concave, or is there something more compex going on?

It took me a few moments, but the circles on the far left & right seem easier to spot. Maybe because the shading on the square is more symmetrical.

Richard Wiseman has more on his site: http://richardwiseman.wordpress.com/2009/09/10/battle-of-the-clever-stuff-3/