You can't make your own ringtones in iTunes 10
Mac Life notes that Apple has removed the create your own ringtone feature from iTunes 10. The feature introduced after the launch of the original iPhone in 2007 allows users to download a song from iTunes for 99 cents and then turn it into an iPhone ringtone for 99 more cents.

At a later Fall Apple music event, Apple added a new section to the iTunes store for both Mac and iOS devices that allows for the purchase of pre-cut iPhone ringtones.
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