This thread is probably starting to show up different procedures in different countries...
In Australia at the six major GA airports (which are called GAAPs) in the state capital cities, the pilot is required to report when joining downwind and state his intentions at that time - full stop, touch and go, stop and go, whatever. Only takes two seconds to do it right.
If there are only a few aircraft in the circuit it's easy to keep tabs on what the guy in front of you is intending to do. It's harder when the traffic is heavy, and in those circumstances I just appreciate being able to have any doubts removed by hearing an unambiguous clearance from the tower and readback from the preceding traffic.