This name is definitely more common in Portugal than it is in Brazil. Over here you don't see it on kids very often. I know three guys with this name from Portugal, while I've met only one from Brazil.
Pronounced [goñ-SAH-loo] (the "n" has a nasal sound, as in "don't).It's quite common in the younger generations. The common diminutives are Gonçalinho, Gonça, Gonças, and Gonzo.