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In location-based services, users with location-aware mobile devices are able to make queries about their surroundings anywhere and at any time. While this ubiquitous computing paradigm brings great convenience for information access, it also raises concerns over potential intrusion into user location privacy. To protect location privacy, one typical approach is to cloak user locations into spatial regions based on user-specified privacy requirements, and to transform location-based queries into region-based queries. In this paper, we identify and address three new issues concerning this location cloaking approach. First, we study the representation of cloaking regions and show that a circular region generally leads to a small result size for region-based queries. Second, we develop a mobility-aware location cloaking technique to resist trace analysis attacks. Two cloaking algorithms, namely MaxAccu_Cloak and MinComm_Cloak, are designed based on different performance objectives. Finally, we develop an efficient polynomial algorithm for evaluating circular-region-based kNN queries. Two query processing modes, namely bulk and progressive, are presented to return query results either all at once or in an incremental manner. Experimental results show that our proposed mobility-aware cloaking algorithms significantly improve the quality of location cloaking in terms of an entropy measure without compromising much on query latency or communication cost. Moreover, the progressive query processing mode achieves a shorter response time than the bulk mode by parallelizing the query evaluation and result transmission.