1. You look for the mp3 or wav file that you want to convert to a ringtone. With my example I will be converting the Boom Boom Pow of Black Eyed Peas.
2. Drag the file to iTunes.
3. Select the file in iTunes, you right click the file and look for Get Info.
4. Look for the Options Tab and you will see the Start and Stop from there you can choose what part of the song you want to be your ringtone with my case I usually start at 00:05 to 00:34. You can even choose to extend it but sometimes there are irregularities and as what I have read usually for ringtones are up to 29 seconds only.
5. After which you right click the file again and look for the Create AAC version.
6. Once its done you will the AAC version file below the original file. You locate the file and change the extension for MAC users you can click on the file and change the extension from .m4a to .m4r. Those windows users you hit the F2 key and change the extension to .m4r also.
7. A dialog box window will pop to confirm and just click use .m4r.
8. Drag the new file back into iTunes. Now you plug your iPhone and go the ringtones tab and manually check the file created.
10. Now sync your iphone with iTunes.
11. In your iPhone assign the ringtone to whomever you wish.