It's been over a year since Apple "legalized" the creation of custom iPhone ringtones in iTunes. But there are still two major problems with ringtones created this way. First, you can only make ringtones with songs you bought from the iTunes Store. Second, you must pay 99 cents for each custom ringtone you make, which means you might be spending 2 bucks for that snazzy little sound used to announce incoming calls.

PocketMac's RingtoneStudio allows you to easily create custom ringtones with almost any audio or video file you might have on your Mac's hard drive, as long as they're not files with DRM-protected (like  songs purchased through iTunes). To create a ringtone in Ringtone Studio, you simply drag and drop a song, sound, or even a QuickTime-compatible video file onto the RingtoneStudio window. You can also drag and drop songs and videos purchased from iTunes. We had good luck with a wide variety of song and video formats, but if you have some oddball formats in your collection, they may not work as well.

 
PocketMac's  cropping tool allows you to grab just the right section of audio for your custom ringtone. 

Depending on the length of the song or video, RingtoneStudio gives you a few cropping options for selecting the perfect audio clip. If your clip is less than 30 seconds long, RingtoneStudio automatically converts the entire file into an iPhone ringtone and loads it into your iTunes ringtone collection. If it’s longer than 30 seconds, you must select which 30-second section you want to clip out. It would be nice to have the cropping option available for clips shorter than 30 seconds long as well.

If you bought most of your music from the iTunes Store, this software might not be such a good deal, since you can only convert these DRM-protected songs to ringtones using iTunes anyway (although you can also strip the DRM from your iTunes music--as long as you're not doing it to start a side biz as a music pirate). Try as you might, attempting to convert DRM-protected songs in RingtoneStudio will only give you blank files in iTunes.