A free drag & drop application that allows you to drag AAC ringtones, which then adds it to the iPhone Ringtones tab in iTunes. Then, the next time you sync your iPhone, the ringtones will be ready.
Note: Apple may release a version 7.4.2 patch that makes this program obsolete, like they did with 7.4.1.
What’s New in this Version:
Version 1.3.1: Only songs 40 seconds or shorter will be accepted, to match what the iPhone will take.
Apple iTunes 7.4.1.