updated 02:30 pm EDT, Tue September 11, 2007
Users can now purchase iPhone ringtones based on already purchased tracks from the iTunes store for $.99 each. The functionality was announced during Apple's September 5th media event, where new iPods were introduced and the iPhone's price was cut $200. The process is relatively straightforward. Users select a ringtone-eligible song from their iTunes Music library, click the bell icon next to the song name, or choose Store > Create Ringtone, then use the ringtone editor (which appears at the bottom of the screen) to adjust the highlighted area to choose the preferred segment of the song (up to 30 seconds). The next time the iPhone is synced, the ringtone will appear in the Settings section.
With regard to tips on creating a good ringtone, Apple says: "If possible, start and end your ringtone at natural breaks in the song — the audio waveform can help you find these spots. Or use the Fade In or Fade Out feature to ensure a smooth transition between rings."
You can also assign a ringtone to a specific contact by going to the Phone application, and then tapping Contacts. Choose a contact, and then tap Edit, then "Assign Ringtone" and choose the ringtone.