As promised, Apple has released iTunes 7.4. The release notes provide details of the following changes:
With iTunes 7.4, sync your favorite music and more with the new iPod nano (third generation), iPod classic, and iPod touch, plus create custom ringtones exclusively for iPhone with many of your favorite songs purchased from the iTunes Store. You can now also play purchased videos with closed captioning (when available), easily rate your favorite albums from one to five stars, and watch videos at a larger size inside the iTunes window.
Apple announced Ringtone support during their September 5th event. Ringtones conversion will be available in select iTunes store tracks for an additional $.99. This functionality isn't expected until next week.
iPhone users could alternatively use shareware utilities such as iToner (Mac) or iPhoneRingToneMaker (PC) or freeware tools such as iFuntastic, however at present it appears ringtones added by 3rd party tools are deleted when you sync with iTunes 7.4.
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