Ok, I've tried this method many different ways, and the best way I could come up with was the following, detailed out step by step:
First, pick the mp3 you wish to edit. Edit it down as an mp3, and save it as an mp3. Put it into a folder, like a "ringtones" folder somewhere
Load the edited mp3 into itunes, and convert it to .m4a. Don't convert your original song first and then edit it; edit first and then convert.
Now that it's converted, right click your converted song in itunes, and hit "show in finder." Move that converted file to the same folder as your edited mp3.
Remove both versions from itunes. You could probably keep the mp3, but why?
Now right click your m4a file in finder, and hit "get info." Change the extension there to .m4r.
Double click the renamed m4r file, and it will load up into itunes 7.4.0, under "ringtones."
Sync the iphone. It will show up, but will not play.
Now go back to that original song, and hit "get info" again. Rename it back to .m4a, and then load up MakeiPhoneRingtone. Drag your m4a file to MakeiPhoneRingtone, and it will show up in itunes under "ringtones" again.
Sync your iPhone again. Now it will play.
Just so you know, this was the only way I could get my ringtones to load in itunes under "ringtones," show up in my iPhone, and play. If I did any of these steps out of order (convert the song first, etc), it would not work. I would also recommend doing one or two songs at first to verify your results, and then doing a few more at a time. It's time consuming at first, but after a while it gets better.