You might *think* you want to just use the music in your library as a ringtone, but you are wrong. If you have a favorite song, what you really want the phone to ring with is the hook or the chorus of that song, not the whole song played from the beginning. You want the most recognizable 10-second snippet. And you'd never want this ringtone snippet to play in "shuffle" mode along with your other songs, so we can't just mix ringtones in with the other music.

Thus, Apple needs to provide an interface in iTunes and on the phone to let you manage "ringtones" as a separate information category. My guess is that the software for handling this isn't yet elegant enough to pass muster, but we'll see this feature show up as a software update before Christmas. Ideally there'd be an interface to let you pick any song in your library and identify the start and end point for playing it as a ringtone.