How To: Use Your Own Songs As Ringtones Using iTunes 7.4's Built-in Ringtone Manager
Here is how to use any unprotected (and also possibly FairPlay protected; I haven't tested it) song as a ringtone on the iPhone using iTunes 7.4's built-in ringtone manager. Essentially, what the process does is trick iTunes into thinking that the song you are using as a ringtone is actually an iTunes Store ringtone that you purchased. The process is actually quite simple. I tested this under Windows, so if you're using OS X, adjust the instructions accordingly (I'm pretty sure it will work under iTunes for OS X also, but I haven't tested it, and I'm not that familiar with OS X.) Here it is:
Step 1: Make sure that the song you want to use is in m4a format (m4p may also work; I haven't tested it)
Step 2: Change the extension from .m4a (or possibly .m4p) to .m4r
Step 3: Import the song into iTunes
Step 4: There is no step four. There's no step four! ;)
That's it! You're done! The song will not appear in your Library, but will rather appear in iTunes under your iPhone --> Ringtones tab. The next time you sync, you'll have it on your iPhone as a ringtone. If you want, you could also batch change the extensions of the .m4a files you want as ringtones to .m4r by going into the command prompt and cd'ing to the directory the files are in, and then executing the command ren *.m4a *.m4r under Windows (or its equivalent on the Mac).
And now that I've successfully made the world a slightly more annoying place by making it easy even for iPhone owners to have obnoxious ringtones, I'm peacing. Later.
P.S. - Shout out to Pat! You're awesome man. I miss you!