If you’re using iPhone already, you must be familiar with iTunes. There’s a simple way using iTunes to do it. Many tutorials around. Just google for it. Here’s a good one.
But I like to make precise cuts, and add fade-in/fade-out effects. When I rip the audio from some video, I need to amplify it. So I use a free audio editor to edit the audio file. Audacity. Windows, Mac and Linux versions available. But it’s not that user-friendly however, check out the basics in the documentation section. And for iPhone ringtones, one must download the FFmpeg plug in. Check out the details here.
When the required audio cut is made, export it as m4a. Then change the file extension to m4r. That’s it.
BTW, I use various video editors to rip the audio from videos, depending on the video type. Virtualdub, Avidemux, xvid4psp, things like that.
Posting this because a friend asked on twitter.