Tables of contents cannot be in text boxes. But you can convert the text box
to a frame: In the Format Text Box dialog box, there is a button for the
purpose on the Text Box tab.
I figured out how to do it satisfactorily. It requires creating a couple
macros but I can program Word to do what I need.
The trick was in selecting the TOC and then adding the text box (in Word
2003). I loss the connectivity, i.e., ability to update the TOC with F9,
once it is in the box but the macros will take care of the formatting.