You can't make a ringtone from iTunes purchased music in Garageband though, which is what the OP is trying to get at. This
article has some basic steps (though without screenshots) to create a ringtone in iTunes from a purchased song. Note however that when you make a ringtone in iTunes, a) it can only be used with an iPhone and b) that you technically buy the song again so its another 99 cents.
P.S. Found another article
here that kinda discusses all the ins and outs of ringtones from iTunes.
P.P.S. More info (with screenshots) on iTunes ringtone creation:
here