first off...is this possible?

I have Adobe Photoshop 7.0. I'm still very new at all of this. I have so many round frames that so many talented people have made, and well I dont know how to use them! I think i'm going crazy, maybe its just me. I've tried all the buttons on there (no I dont know what everyone of them do exactly) but I just cant get it to crop into a circle.

If anyone knows what to tell me I will greatly appreciate it!

Thanks,
Rian