I can confirm this because I did exactly this...
My 19" Santiago's were too harsh on local roads so swapped them for 18" and shod them in some decent F1's in 225/40/18 (got rid of the 'orrible Bridgestones with the 19's). I used VCDS to change the tyre circumference to the same as what 18" wheels would be coded to (copied from Votex):
17 - Instrument
byte 3
bits 0-2
"tire circumference"
225/45-18 = 25.972" Version 6
205/55-17 = 25.877" Version 7
225/40-18 = 25.1" Version 3I can confirm that my wheels remain round and have not gone not square

, no issues with DCC or anything else and the ride is now much more supple in 'Normal' mode, previously I left it in 'Comfort' as it was just too jarring to use any other setting.
Imteyaz.