Can you select the text with the Text tool, and add a stroke to the text?
Select your text with a selection tool. In the Appearance panel, from the flyout at upper right, add a new stroke. Drag it below the contents line in the Appearance panel set it to the stroke and color you want. You may add more strokes in the same way. You cal also add a new fill, drag it to the bottom and use the Effect>Convert to Shape to make a filled box behind the text which will expand and contract as it is edited.
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If I understand you the right way, you wish to the type to have a background of white with a black border.
In that case, you should:
1) Add New Fill, drag it to the bottom of the Appearance palette and Effect>Convert to Shape as Larry says, choosing a (Rounded) Rectangle; make it white for contrast; select Relative and use the same Extra Width/Height (and set the Corner Radius accordingly), choose values corresponding to the outside of the black border;
2) Repeat 1), which will give you a fill just over the bottom one, with smaller values to fit; change the colour of 1) back to black in the process so you can see the final result.
I appreciate your responses, but it is beyond me to be able to follow your instructions. I am a newbe to Illustrator CS4. Would it be possible for you to send me a file with some text with outline as described? My email address is: email@example.com
I believe it may be worth giving more detailed instructions:
1) Create the type with the Type Tool;
2) Open the Appearance palette (it is with the Navigator palette, you may click it in the Window dropdown);
3) Click the top left arrow and select Add New Fill; that will be at the top in the Appearance palette itself and selected (it will remain selected in the following steps, unless you do something else, then select it again;
4) Change the colour to white (in the Color palette set K to 0); it will now colour the original black type;
5) ClickDrag the Fill down below Characters, which will now become visible again;
6) Click the Effects button and choose Convert to Shape and select the kind of rectangle you wish (Rounded Rectangle assumed), and choose values in the window that opens; select Relative and use the same value for Extra Width and Extra Height and set the Corner Radius accordingly, choose values corresponding to the outside of the black border;
7) Repeat 3) - 6) only using smaller Extra Width/Height and Corner Radius (half the reduction of width/height);
8) Select the bottommost Fill and change the colour back to black;
9) Adjust sizes of the two rounded rectangles until they look right.