That depends on how you're drawing the object in the first place.  And on  
what you mean by "highlighted".  And on what you mean by "create".

Let's make some assumptions, since you haven't provided any details:

    * We've got a data structure that's a collection of ellipses
    * Each ellipse includes information as to size, rotation, and position
    * We draw each ellipse based on this information whenever our form's  
OnPaint() method is called
    * We already have code in place to track mouse input
    * By "highlighted" you simply mean the ellipse that is current being  
adjusted by the user

Then, you'll want a way to identify which of the existing ellipses is the  
one that's "highlighted", and when you are drawing all of the ellipses,  
draw that one differently to indicate that it's been highlighted.

For the former, you could do it a variety of ways.  Such as, keep a  
reference to the "selected" object, and compare this "selected" reference  
to the current object as you enumerate your collection of ellipses for  
drawing.  Alternatively, the objects themselves could maintain state with  
respect to whether they are selected or not.  You'd simply draw each  
ellipse differently depending on this state.  This alternative technique  
has the advantage of more easily supporting multiple selected objects, but  
has the disadvantage that your model data now also includes user-interface  
state data.

I'm sorry if the above sounds vague.  Unfortunately, it's not really  
possible to provide specific advice without being presented with a  
specific question.

Pete