Let me preface this by saying I haven't tested this myself and you should read the warnings before you try this.
Some rather complicated instructions for installing custom ringtones on the iPhone have been floating around the net of late. Unfortunately they required some pretty involved under-the-hood tinkering. The newly released iFuntastic is designed to simply this process immensely. This little program allows you to install and manage custom ringtones just by selecting them in a GUI. There is a warning that after using this iTunes won't automatically launch when you dock your iPhone, but you can still sync manually.
iFuntastic is a free download, but you will have to register at modmyiphone.com
Update: Direct link (no registration required). iFuntastic is Intel only.