You can put a frame around text with the \fbox
command:
\fbox{text}
To put text in an ellipse, you can use the TikZ/PGF package and its shapes.geometric
library:
\documentclass{article}
\usepackage{tikz}
\usetikzlibrary{shapes.geometric}
\begin{document}
% You can also make a \newcommand for this
\tikz[baseline=(e.base)] \node[ellipse,draw] (e) {text};
\end{document}

Note that in both cases the text acts as one "big" box relative to the paragraph and will not be broken in separate lines.
If you wish to typeset whole paragraphs in a frame that does not expand to full line width if the paragraph fits on one line, then the following approach (inspired by \@makecaption
) might do:
\documentclass{article}
\usepackage{lipsum}
\makeatletter
\newcommand{\varbox}[1]{%
\setlength{\@tempdima}{\dimexpr\textwidth-2\fboxsep-0.8pt\relax}%
\sbox{\@tempboxa}{#1}%
\ifdim\wd\@tempboxa>\@tempdima
\fbox{\parbox{\@tempdima}{\strut #1}}%
\else
\fbox{\strut #1}%
\fi}
\makeatother
\begin{document}
\lipsum[1]
\noindent\varbox{\lipsum[2]}
\noindent\varbox{not too much text}
\end{document}
Typesetting large blocks inside ellipses does not seem practical to me.
\fbox{text}
?