Yes, it is very similar but requires a bit more work
With your method you must make your ringtone on your own (manually) and it must have the filename end in .m4a. My scripts allow you to do the whole process through iTunes (and a short step in GarageBand) with any unprotected file format such as AAC, MP3 etc. Just select a song in iTunes and turn it into a ringtone via the script menu. It'll take you to GarageBand to edit it to your hearts content, and then you end up right back in iTunes with the Ringtone installed.
Doesn't really matter how you do it, as they both produce the same results
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RingtoneMaker1.1:
http://www.summitnorthwest.org/RingtoneMaker.zip
Enjoy!