I saw a guide somewhere that walks you through doing it in iTunes. It's really simple, just have to change the start and end time in the properties of the song (in other words, select 30 seconds of a particular song) and then right-click convert it to AAC. Then you just have to drag the file to your desktop, change the extention from .m4a to .m4r and then double-click it to have iTunes copy it to the ringtone folder.
Sounds a like a bit of work, but it literally takes about 15 seconds to make a ringtone out of any song in your iTunes library (whether you bought it from iTunes or not).
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