Yes, in change when buying from coin shops. I think that is correct: breaking up proof sets for the silver and throwing the leftovers into circulation.
I've gotten proof quarters and halves in change from the coin shop. Of course, they're the non silver variety. I think they're just common and/or damaged/low grade, so it's fun to let them circulate.
Unbelievable! I swear to god, I did not realize I was the last one to reply to this last year. I did a google search for proofs in circulation, and this came up. Seeing it was a cointalk thread, I decided to reply. I am a little weirded out that I was the last one to reply to it over a year ago with practically the same thing I just wrote this year. I think I am losing my mind.