By far the easiest I've seen is http://audiko.net/. You can upload your mp3, cut, edit, then create a ringtone of your liking.
You can also download other ringtones others have made previously.
My thoughts exactly.Wirelessly posted (Mozilla/5.0 (iPhone; U; CPU iPhone OS 4_3_3 like Mac OS X; en-us) AppleWebKit/533.17.9 (KHTML, like Gecko) Version/5.0.2 Mobile/8J2 Safari/6533.18.5)
Garage Band.
I use "Ringtones" from the app store.