[1] Right-click the song you want to edit, click "Create AAC Version"
[2] Right-click on the AAC version, click "Get Info"
[3] Go to Options tab
[4] Check the box "Start time" and specify the start time of your intended ringtone
[5] Check the box "End time" and specify the end time of your intended ringtone
[6] Click OK
    You'll have your ringtone but you can't use it yet because it's not in iPhone ringtone format
[7] Right-click on the edited ringtone, click "Show in Windows Explorer"
    Your ringtone will be in .m4a format
[8] Change the extension by renaming it to .m4r
[9] Add it to your iTunes library
    You may find the ringtone in "Ringtone" library instead of "Music"

Hope it's not too confusing.

Hope you managed to create your custom ringtones.
The AAC version of the tone will usually appear under the same list as your original song.