What elements can be contained within a <a> tag?

Inline elements ( a, span, strong, em among others ) can contain other inline elements and text nodes. An anchor can contain a span, which can contain a text node.

Generally, block-level elements may contain inline elements and other block-level elements. Generally, inline elements may contain only data and other inline elements. Inherent in this structural distinction is the idea that block elements create "larger" structures than inline elements.

From http://www.w3.org/TR/html401/struct/global.html

As noted in other answers, you can't nest an a in an a.

An <a> tag can contain any Inline Element besides another <a> tag.

See the anchor section of the specification.

<!ELEMENT A - - (%inline;)* -(A)       -- anchor -->

The relevant section is (%inline;)* -(A), which means "Anything in the group %inline excluding A elements". %inline is hyperlinked to make it easier for you to expand it.

As of HTML 5, <a> may contain not only (valid) inline elements, but also block elements, etc.

W3: http://dev.w3.org/html5/markup/a.html