Apple's release notes for iTunes 7.4.2, released earlier today, state that the update "addresses an issue with creating ringtones using iTunes Plus song purchases." What they don't mention is that the update breaks most of the unofficial methods for transferring AAC tracks to the device, including Rogue Amoeba's free MakeiPhoneRingtone, and this manual trick.
One reader writes:
"iTunes 7.4.2 wiped out ringtones that I had custom-made from CDs I own, edited in Garageband, converted to AAC and saved to iTunes Ringtone area using MakeiPhoneRingtone (v1.0) from rogue amoeba. After downloading 7.42, the ringtones section is now empty. I have not performed a sync with iPhone yet, but I am sure when I do, they will be wiped out."
In fact, the only third-party tool that appears to still function properly is one that was broken, consecutively, by iTunes 7.4: Ambrosia Software's $15 iToner.
Unfortunately, it appears that iTunes 7.4.2 is also causing problems with Apple's own ringtone creation mechanism. Some readers report an issue where tracks that were previously eligible for ringtone creation are suddenly not. iPhone Atlas reader Shelly Helfand writes:
"The new update has taken away the ability to create ringtones on the songs that previously were eligible. Where there was a ringtone symbol before it is no longer there."