How to Make Ringtones

Making your own ringtone basically consists of creating a short mp3 file and transferring it to you cellphone. There are several ways to do this, depending on what exactly you want and how deep you want to get into the creative process.

Online Ringtone Makers
Ringtones Software
Your Compositions

Online Ringtone Makers

If all you want is to take an existing song or music file, and use a portion of it as your ringtone, then you don't need to look further than this. There are some very neat online applications for ringtones available, which are free and get the job done quickly.
These two are pretty much one and the same thing, they also have the same IP address, so probably the same owner as well:

They've definitely done a nice job. These applications include various extra features, when you click on the Advanced or Expert Mode.

Ringtones Software

If you would rather do the same thing offline, you can use any of many sound editors available for free.
Here are a couple of resources that can help you with your ringtone creation. All of them are completely free, with no hidden surprises.

WavePad (available for Windows or Mac Intel or PPC)
MediaCoder
MediaCoder is a free universal batch media transcoder! That means it can convert any audio or video file format into any other video or audio file format.

Your Compositions

To go a step further would be to create your own music files and use them as ringtones. Forget about other people's creations and make your own!
I warmly recommend the Magix Software for that. There is a ringtone maker from Magix as well, but I haven't tried it out personally. What I can and do recommend for music creations is Magix Music Maker Producer Edition. It costs a bit, but the price is fair.

So, get creative!