Hack the iPhone has published instructions on how you can add custom ringtones to your iPhone. Unfortunately it only works on Intel-based Mac computers, at least for now.
Custom ringtones are one of the biggest requests by people that want to modify their iPhone to make it unique. This page will teach you how to add your own files to the iPhone to use as a ringtone. For those of you PPC Mac users out there, for whatever reason the universal binary of jailbreak does not work. The only thing preventing Windows users from doing this is the lack of someone to write the interface program..