There's been lots of online discussion about Apple's policy of charging for ringtones on the iPhone. One commentor at TUAW makes the following interesting point:

FYI this has nothing to do with Steve Jobs and Apple. Last year the RIAA "snuck" into DMCA law that ringtones are considered separate, and that profits have to go to the record label. This means that if you own a song and turn it into a ringtone technically it's "illegal". This is the only reason Apple is requiring you to pay for ringtones. Once again the RIAA is screwing people over.

Please digg this comment so everyone can scream MURDER to the RIAA. Most people shouldn't worry, you can take your songs and turn them into snippets with all kinds of tools out there an upload them to your iPhone. My guess is iTunes will only let you modify songs you paid for the ringtones because of the stupid LAW that got passed.

I haven't yet verified if this claim is true or not.

But if I already legitimately own some music and can play it anytime I want on my iPhone, I don't see why I can't also use it as a ringtone.