In this specific case, note that bash has a variable called PWD that contains the current directory: $PWD is equivalent to `pwd`. (So do other shells, this is a standard feature.) So you can write your script like this:
#!/bin/bash
until [ "$PWD" = "/" ]; do
  echo "$PWD"
  ls && cd .. && ls 
done
Note the use of double quotes around the variable references. They are necessary if the variable (here, the current directory) contains whitespace or wildcards (\[?*), because the shell splits the result of variable expansions into words and performs globbing on these words. Always double-quote variable expansions "$foo" and command substitutions "$(foo)" (unless you specifically know you have not to).
In the general case, as other answers have mentioned already:
- You can't use whitespace around the equal sign in an assignment: var=value, notvar = value
- The $means “take the value of this variable”, so you don't use it when assigning:var=value, not$var=value