Roll it up and keep the cat away!

just get one of the oblong ones and take the end of it and start wrapping it around two of your fingers. Keep wrapping until you get the ball size you want.

If you're a real perfectionist on it (I would be), get some tennis balls and a glue gun. Use just a dab at the start, and a little bit each half turn sos the yarn doesn't shift. Leave the end loose (glued down about half a rotation before) and give it a couple of inches that do move so you can hang them or hang the end out the edge of the basket.

Some yarn actually does come in more roundish balls. The oblong things you're referring to are callled "skeins". A local yarn shop would likely carry these round balls, but it would likely be more expensive than the skeins you can find at Wal-Mart. You can also purchase a ball winder from a local yarn/knitting shop.

I would suggest buying a skein of yarn and use the tutorial on how to wind a center-pull ball from knittinghelp.com (the link is below, just scroll down her page a bit). I'm not that co-ordinated but most of the time the skeins I wind into balls for knitting are (nearly) perfect.

Goto this web site. There will show you how to make a yarn ball that you can pull from the center.