Okay, so thanks to whiteboyz59 on YouTube, I figured out that if you
Go to Control Panel (Then classic view if using Vista)
Click on 'Folder Options'
Then click on the 'View' tab.
Uncheck "Hide extentions for known file types"
Check "Show hidden files and folders"
Then....to make the ringtone.. (It doesn't matter if you bought it from Apple or not)
1. Right click on the song you want in iTunes,
2. Click 'Get Info'
3. Click on the 'Options' tab
4. Select your start and stop time (Type in what part of the song you want your ringtone to be)
5. Click 'OK'
6. Then, right click on the song you are using and click 'Create AAC Version'
7. When that finishes, repeat steps 1-3 on the orginal song and uncheck the start and stop times.
8. Make a folder in 'My Documents' called "Iphone Ringtones"
9. Click on the shorter song (the one you made AAC) and drag it to your folder you just made.
10. Right click on the file and click 'Rename'
11. Change the '.m4a' to '.m4r' therefore making it a ringtone. (It will say 'Changing the file may cause the file to become unusable. Do you want to continue?' You click 'yes)
12. Go back to iTunes and delete the song you just moved. Click 'Move to Recycle Bin' because you don't need it anymore.
13. Click on your 'Ringtones' tab in iTunes.
14. Drag the newly made ringtone from your 'iPhone ringtone' folder into iTunes.
15. Plug in your iPhone and in the ringtones tab click 'Sync all ringtones'
Your ringtone is now on your phone!