Ringtonator provides a easy to use application which "converts" an AAC file into a Ringtone from iTunes' perspective.

The application modifies metatags based on a followup discovery by Cleverboy about what exactly distinguishes a Ringtone from a Song files in iTunes.

In essence, Apple introduced an additional tag-type that identifies a Ringtone. These tags can be modified by Atomic Parsley manually and should provide a relatively future-proof method to convert songs into Ringtones that iTunes recognizes and treats correctly.

I then took a file I'd recorded myself, and saved as an AAC, and applied the same "stik" metadata to the file using a program called Atomic Parsley.
The program outputted the new file, and I double-clicked on the file. The file immediately appeared in my ringtone list, and after syncing, it appeared on my phone without one iota of complaint. --NONE.

Ringtonator is a Mac application, but Atomic Parsley is available for both Mac and Windows.

Update: MakeiPhoneRingtone from RogueAmoeba has been updated to use the same described technique to make Ringtones.

Related Forum: iPhone