Daring Fireball: Ways in Which iTunes's Just-Released Official Ringtone Support Is Weird, Rude, and/or Just Plain Buggy:
Think about how weaselly this wording is. It’s like a politician who’s asked a pointed question about topic A, and responds with a non sequitur talking point regarding topic B.
User: I’d like to turn this song right here into a ringtone.
iTunes: You can turn some of those songs over there into ringtones.
Perhaps whoever wrote the copy for this dialog was simply too ashamed to spell it out: iTunes will not allow you to use any non-iTunes Store audio file with its built-in Create Ringtone feature.