I just got this iPhone, and what a hassle trying to figure out how to create my own ringtones. I think I have it down now. I’ll create a ringtone from an MP3 file using only iTunes. I’ll be demoing on iTunes 9.0.0.70. iTunes is needed to copy the ringtone to the phone, but we will also use to to create an AAC encoded audio file.
[more Click here to see my process]
I have no music in my iTunes (I don’t like iTunes, and don’t use it to manage my music library or my iPods). This makes it easier to follow this tutorial.
Import your MP3 into the iTunes library. From the “File” menu, select “Add File to Library…”, or press Ctrl+O.
Browse to the source MP3 file. This will add the file to the iTunes library.
Right-click the file and select “Get Info”
In the resulting dialog, check the “Start Time” and “Stop Time” checkboxes. Enter in the start and stop times in the MP3 that you want to use for your ring tone. Ringtones are limited to 30 seconds (some sources say that you can do 40 seconds…I haven’t tried).
With the item selected in the library, select the “Advanced” menu, and select “Create AAC Version”. This will create a copy of the MP3 file, only using the region that was selected in the previous step.
In cases like mine, where my music library is not controlled by iTunes, the source MP3 file is in a different location from where the resultant AAC encoded file is saved. My AAC is saved to %My Music%\iTunes\iTunes Media\Music\Disturbed\The Sickness.
The original file can now be removed from iTunes if you are not using iTunes to manage your MP3s.
Now, delete the newly created AAC encoded file from the iTunes library. Make sure you answer “Keep File” when iTunes asks if you want to move the song to the recycle bin or keep it.
Now, rename the file extension from M4A to M4R. Then import THAT file into iTunes. Now it should show up as a ringtone. 
Ensure that iTunes is set up to sync ringtones, then, sync your iPhone.
Now on your iPhone, go to Settings, Sounds, Ringtone, and select your newly upload ringtone.
Now call yourself and enjoy.
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