To make an iPhone ringtone out of ANY song, there are several solutions available. Some of them are free, some are not. Below you will find three different and free ways to create ringtones for your iPhone:
Ringtones with iTunes
1. Right click on the song (in iTunes) and click "Get Info"
2. Options Tab
3. Edit the "Start Time" and "End Time" to where you want the ringtone to start and stop
4. (Click OK, but you knew that)
5. Right click on the song and select "Create AAC version" (if it doesn't say that go to 5a, if it does go to 6)
Edit -> Preferences -> Import Settings (middle of the box) -> (Import Using AAC Encoder). Go back to 5.
6. Once you've done that you should have a duplicate of the song, but just the part you enclosed back in step 3.
7. View your desktop (or w/e) and iTunes at the same time, click and drag the new song to the desktop
8. Rename the file extension from m4a to m4r.
9. Double click on the "Ring" file, it should open in iTunes.
10. Sync your iphone, on the ringtones tab... etc.
If you're looking for another free and easy way to create iPhone ringtones, there are two websites that are worth to be mentioned. Audiko and Myxer allow you to create ringtones out of any song on your PC and to download ringtones that have been created by other users. On Audiko just upload the song that you want to convert into an iPhone ringtone (don't worry this is totally legal) and choose the part of the song that you want to hear when you receive a phone call. The website will convert the song into the fitting ringtone (for iPhone or other devices).
iPhone ringtones software
The 3rd possibility to make iPhone ringtones, is the use of software that has be designed for this specific purpose. Ringtone Maker can be found in the iTunes Store and allows you to create ringtones directly on your iPhone. The Lite version of Ringtone Maker is free, and the pro version costs $0.99. Another free software to make iPhone ringtones is called iRinger and runs on your computer. It is quite easy to use and once you saved the ringtone on your PC you can upload it to your iPhone using iTunes.