So, I took a chance this AM and downloaded the 1.1.2 firmware via the Akamai link.
Option-clicked on the Update button in iTunes, pointed it to the .ipsw file, and it updated without a hitch.
I can also confirm that the ringtone methods described here work perfectly. I just made seven or eight ringtones from songs in my iTunes library by:
--Dragging the desired songs from iTunes to the Desktop.
--In GarageBand, trimmed the songs to the 15-20 seconds I wanted. Also used the Track Volume controls to fade out the song at the end.
--Used the Share >> Export Song to Disc command and saved the files as "Good Quality" AACs.
--Renamed each file to change the .m4a extension to .m4r.
--Dragged the files into the iTunes library. They automatically went into the Ringtones listing.
--Connected the iPhone, and all of my newly-created ringtones appear in the "Custom" section.
Not a bad process, similar to what I used to do with my Treo 700p to make my own ringtones.
And the 1.1.2 firmware is not just for European users. As other US users have pointed out on this thread, if you do a Restore in iTunes you get the 1.1.2 version.
Not sure why Apple is holding it back from the "Update" button in the US; probably trying to get through the European launch first. But the firmware is the same, and those of you hesitant about upgrading, all I can say is that it worked perfectly for me.
Hopefully, free custom ringtones are here to stay.