The good news is that iRinger is free and that it lets you create iPhone ringtones from almost any source. You can even extract audio ringtones from videos. The bad news: the app is only available for the Windows OS. (There's a certain amount of irony there.) Once you've created your ringtones, then the application exports them to iTunes. You can Adjust ringtone length, volume, fade in, fade out, and loop gap, as well as add audio effects.