While not mentioned in any of the reviews, we've received word that custom Ringtone support is in fact a feature of iTunes 7.3.
A "Ringtone" tab was shown during the original iPhone announcement at Macworld San Francisco, as shown in this photo from Engadget:
Click to Enlarge
iTunes 7.3 is listed as a requirement for the iPhone but has not yet been released by Apple. Reportedly, the new version of iTunes will allow you to convert any song that is available on iTunes into a ringtone with the "Make into Ringtone" feature. The cost for this service is $.99. It's not clear, based on information available, whether or not CD-ripped songs can also be easily converted or this is specifically an iTunes Store feature.
When a song is selected for conversion, a "garageband like" interface comes up to allow you to pic the 30 second clip you want.
Forum member FreeState noticed that Apple's Question/Answer list now shows an image of iTunes with 8 tabs (vs 6 in the video)
One of these tabs could represent Ringtones.
Update: kingjimmy9 let us know that Apple has "corrected" the image and put up one with only 6 tabs:
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