Public Sub AddGraphicToMap(ByVal map As IMap, ByVal geometry As IGeometry, ByVal rgbColor As IRgbColor, ByVal outlineRgbColor As IRgbColor)
Before you call your AddGraphicToMap procedure you need to convert your XY to a Point then use the ITopolocalOperator.Buffer method to create your circle. This would become your geometry that you pass to the procedure.