I found this link Create a SqlGeography polygon-circle from a center and radius
which says it is meters. This also shows meters on my system.
SELECT * FROM sys.spatial_reference_systems where spatial_reference_id = 4326;
However, when I create a circle using this code, the resulting circle has a radius of about 27 miles when I plot it using google maps api and manually measure the distance, so something is definitely off. It should be 1/2 a meter and it's actually 27 miles.
DECLARE @g geometry;
SET @g = geometry::STGeomFromText('POINT(-88.0 44.5)', 4326);
select @g.BufferWithTolerance(.5,.01,1)
-Randy