I just tested it quickly by renaming a previous home-made ringtone file to m4r and double-clicking. It imported, synced to and played on my iPhone without any other steps.

Currently there are no known ringtone hacks for iPhone 1.1.1.

Apple, you’re pissing off your fans. Don’t do this. [we'll just be over here pretending you listened!]

This totally seems like it shouldn’t work.

If you’re seeing “cannot be played on this iPhone errors” like this:

Open your iTunes Library folder and find the Ringtones folder: iTunes Music/Ringtones.

Select your ringtone and change the file extension back to m4a. Yes, m4a.

Sync again and your custom ringtone should be working on your iPhone. Nice.

Update: Confirmed for Windows XP & Vista

Thanks to commenter Robbie, building on steps from Jason Choi, here’s how to get custom ringtones working in Windows:

1. Put m4r files into a ringtones folder on my desktop
2. Opened iTunes
3. Edit > Preferences > Advanced
4. Check “Keep iTunes Music folder organized”
5. Check “Copy files to iTunes Music folder when adding to library”
6. Create playlist called “Ringtones” in iTunes
7. Drag the Ringtones folder from my desktop to the playlist I created in iTunes
8. Made sure they appeared when in the list on the Ringtones tab in iTunes
9. Opened the “Ringtones” folder that iTunes created in MusiciTunesiTunes MusicRingtones
10. Renamed all the m4r files to m4a
11. Try to sync but it fails because it cannot find the m4r files (this is good)
12. Look at playlist created in iTunes with a bunch of Xs next to each ringtone
13. Double click each ringtone (hit browse for the file, and selected each m4a file from the folder in my MusiciTunesiTunes MusicRingtones)
14. Hit sync again
15. Verify they are in your Settings>Sounds>Ringtones