Tommy said:
Not true - unless the vessel has no velocity relative to the body it is orbiting (in a local frame - not counting the movement of the planet). Given any relative velocity - and the vessel not moving (or accelerating) toward or away from the center, the result will be a circle.
To get a circle, you need to accelerate towards the center. The acceleration needed to get a circle is exactly the centripetal acceleration.
Mathematically, the mistake you're making is confusing [math]\frac{d^2 r}{dt^2}[/math] with the radial component of [math]\frac{d^2 \vec{r}}{dt^2}[/math] ([math]r[/math] being the radial coordinate, [math]\vec{r}[/math] being the position vector).
Actually, in polar coordinate system:
[math]\vec{a} = \frac{d^2 \vec{r}}{dt^2} = \frac{d^2}{dt^2}\left[ \begin{array}{c}
r \\
\phi
\end{array}\right] = \left[ \begin{array}{c}
\frac{d^2 r}{dt^2} - r \left( \frac{d\phi}{dt} \right)^2 \\
r \frac{d^2 \phi}{dt^2} + 2 \frac{dr}{dt} \frac{d\phi}{dt}
\end{array}\right][/math]
(If you don't believe me, I can derive it, but it will involve differential geometry. This can be also found at
http://en.wikipedia.org/wiki/Polar_coordinate_system#Vector_calculus).
It's that complicated because it's a curvilinear coordinate system. Even if r is constant (and hence [math]\frac{d^2 r}{dt^2}=0[/math]), the radial component of the acceleration may still be nonzero because of the term [math]-r\left( \frac{d\phi}{dt} \right)^2[/math].
BTW, guess what? [math]\frac{d\phi}{dt}[/math] is the angular velocity [math]\omega[/math], so this term is actually [math]-\omega^2 r[/math] - reminds you of anything?
EDIT:
It's also good to remember when centrifugal force appears. Contrary to what some people seem to think, it's not when a body goes in circles. It's when the frame of reference rotates.
Actually, if you define your frame of reference as a frame, which is located at the center of Earth and is rotating with the same angular velocity that the rocket has, then indeed you can say that the centrifugal force balances the force of gravity. There is no centripetal force then, however, because in that frame of reference the rocket is not moving. It is floating in one place. Forces are balanced, rocket is constantly at rest, everything is fine again.