This is possible, copy your favorite mp3, wma, wav file(s) to the following directory \windows\rings
ame.mp3
where name.mp3 can be anything, altough dont put an entire 3minute track as a ringtone.
to change ringtones select the settings icon, and choose "sound & display" from your today screen.
enjoy your new custom ringtones.
Sent from my HTC Desire.