It's generally recommended that you rest your muscles for 30 seconds to 5 minutes between sets. With shorter rest breaks, it is more likely that you will reach the point of fatigue in fewer reps in the 2nd and 3rd steps.
Doing another different exercise (involving a different muscle group) during the 'rest' break is an entirely legitimate way of training, and is known as 'supersetting'. This is a much more time-efficient way of strength training.
Another option is to do your exercises in pairs, rather than going all the way through your circuit before repeating.
The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.
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