Legal options:
1. Rip the CD to your computer. Download Audacity (Open Source program) Edit the MP3 file how you want it (I add in fades so the ringtone is not jarred together, just google guides). Save and send back to your phone. Boom, phone is yours computer is yours files are yours. LEGAL (and you have a perfect, 100 percent custom made ringtone)
2. If you have Android, get RingDroid. Its a free. legal app that will let you edit the sound file on your phone, like above... Totally legal.
Illegal is when you share the files with someone else, for free, or get files from someone else, for free.