There appears to be some confusion over the new ringtone purchase capabilities built into iTunes 7.4. In a nutshell, iTunes 7.4 includes the capability to purchase ringtone-enabled tracks from the iTunes Store, edit them and send them to the iPhone; however, ringtone functionality has not yet been added to the iTunes Store.
If you click on the iTunes Store in iTunes 7.4 then navigate to the "View" menu and select "View Options," you will be presented with the ability to select the columns that are shown next to tracks in the iTunes Store. One of the available options is "Ringtone." If you check that box, a ringtone column and associated icon will appear next to tracks available from purchase from the iTunes Store. As of yet, however, no tracks appear to be enabled for ringtone purchase.
Apple says the iTunes Store infrastructure should be updated to accommodate ringtone purchases some time in the next several days. An updated version of iTunes will not be required -- the changes will come on the server end.