Honestly after you make the AAC version you should right click it and hit "Show in Windows Explorer" and then go back to iTunes and delete the AAC version you created but hit "Keep File" or it wont work. thats just so you dont have a 30 second song floating around in your music. you can change the file to a .m4r in windows explorer then drag it into itunes. Also remember to undo the start and stop times on what ever song you use for the tone or it will apply to the song and only play 30 seconds of a much longer song (totally annoying).
I didnt have tones for ever because i wasnt going to pay $1 for them.
Im not sure if this voids any warrenties or anything because i guess it used to be a standard option built into itunes when it was first released.
He also looks like Jack Black
I have proof! Want to see?