Import the MP3 into iTunes. Find it in Music, right-click and convert it to AAC. You can now delete the iTunes entry for the MP3 version if you want. Right-click the AAC version and view it in Explorer or Finder. Rename it from .m4a to .m4r. Delete the AAC version's entry in iTunes. Drag and drop the .m4r into iTunes and it'll show up in Ringtones. Make sure your sync settings are set to put ringtones on the phone, and use Get Info to rename it to something useful. Sync.
Note that you can do this for any audio file in iTunes, but the phone won't recognise it as a ringtone if it's too long. You can set the start and end point in iTunes before you make the AAC version. And if you're making a ringtone from an existing song, don't delete the original from iTunes.