Apple has posted a new support document, “How to create custom ringtones in GarageBand 4.1.1,” that describes how to make iPhone-compatible ringtones using the audio editing program. The document states “With GarageBand 4.1.1 you can export your original song, your original audio recordings, or use Apple Loops and iLife jingles to create a custom ringtone for your iPhone.” The process involves loading the song into GarageBand, setting up a “cycle region” of 40 seconds or less in length, and choosing the “Share > Send Ringtone to iTunes” menu option. GarageBand 4.1.1 is available as part of Apple’s iLife ‘08 software suite.
You can also read iLounge’s 10 step guide to Creating Ringtones with GarageBand ‘08.