I'm starting to think that i just shouldn't knit in the round...i've never heard of anyone else having this problem!!
No! Don't give up yet!
When you do 2x2 ribbing with flat knitting, you follow this pattern:
cast on a multiple of 4 stitches
row 1: * knit two stitches, purl two stitches, repeat from *
row 2: * knit two stitches, purl two stitches, repeat from *
So the stitches that you knit in row 1 are purled in row 2, and vice versa.
Now, when knitting in the round, you are always working on the right side (or outside). Therefore you have to knit the same stitches in row 2 that you knit in row 1.
To do that, you can follow the exact same pattern as above. Just make sure to cast on a multiple of four stitches. Then the first two stitches of every round will be knit stitches, and the last two will be purl stitches, and you'll get a nice 2x2 ribbing pattern.
If it still doesn't work out for you, maybe you could post a picture of your knitting? Sometimes it's easier to see what went wrong than to find out through explanations.