Apple wants to sell your ringtones for your iPhone from the Apple Store for two dollars. Figure that's a buck for the song, and another buck to convert it to a ringtone.
An open secret is that any Windows PC with a stereo mix feature and with iTunes installed, and the freeware Audacity sound-wave editor can make completely free ringtones that you can import into iTunes. From that point, it's not overly involved to convert them to AAC (.mp4) and then into ringtones.
Follow along, and we'll show you how.
But first, a caveat. If you have a Vista notebook, stereo mix may have been disabled by the manufacturer. To check, right-click the speaker icon in the system tray and select "Recording Devices." In the Sound dialog, right-click in the list area and select "Show disabled devices."
Is “Stereo Mix” in the list? Does the label beside it say “Working?” If not, right-click it and select “Enable.” If you don’t see Stereo Mix there at all, your laptop is not set up for recording multiple sources, and this procedure will not work for you.