gryphondwb’s Xanga Site has laid out instructions for creating free iPhone ringtones and syncing them via iTunes. It’s simple and it works, we tested it.
1. Duplicate and rename any AAC file (or convert other file types to AAC via iTunes).
2. In the Finder, select it and choose “Get Info” from the File menu
3. Change the file’s extension to .M4R
4. If it is already in your iTunes library, delete the original from your iTunes Library (re-import the original back to your library when you’re done)
5. Double-click your .M4R file to automatically add it to your iTunes library
6. Click on your iPhone in your iTunes “DEVICES” list and select the “Ringtones” tab – you should now see your new ringtone
7. Sync to add it to your your iPhone
You can use another application to edit your song, add fades, etc. before proceeding from step 3 to create a “custom” iPhone ringtone.
We’ll see if Apple closes this hole with a future update.
More info, screenshots, and directions for Windows here.
[Thanks to MacDailyNews Readers “Fred Mertz” and “JMS in TX” for the heads up.]