To see if the elipse has been clicked on there are a few techniques you could use. If you are using an Image to buffer the PictureBox and you are drawing a solid ellipse, you could check the color of the pixel the user clicked on. A better option would be to store the location of the ellipse. You can use a geometric formula to determine if the point clicked is contained within the ellipse (if the ellipse is a circle, a simple distance formula would work).
As to the question of the click event, it sounds like you want to surpress it. To do so you would probably need to inherit the class and override the OnClick method. However, it will probably be better (and easier) to include an if statement inside the handler that only executes under desired circumstances. Instead of using the Click event, you could use the MouseDown or MouseUp events (or a combination of the two) so that you can examine the position of the mouse and decide whether or not to react (or how to react).
