Agree with Youme, er YM, and Froz3n. I made a few tunnels in my time in the last year and have come to find that making a cylinder then vertexing to that cylinder from a cut up block the best way to make anything round. Use displacements is you feel comfortable with them but the vertex tool is much quicker and easier if you know very little. displacements are nicer as they can be smoother, when subdivided.
*edit:
1. Build cylinder
2. vertex outer block
3.take block and copy twice stacking one on top of each other.
4.select viewable surfaces you want round. on all 3 sets
5. make displacemnents
6. subdivide
7. delete the outer sets leaving the middle one as the round tunnel, or cylinder you want.
There are tutorials all over on how to make nice round corners with displacements.
I also watched as my hammer died painfully as I carved this tunnel into what I thought was a stand alone wall only later to find that temporarily hiding thing wont prevent them from being carved. my vertices were are 6 trillion. also dont cut a torvus to make 90's. the little slices are hard to control. I lost so many moving things around resulting in leaks EVERYWHERE.