Yeah, that's your problem right there. Service providers want you to spend a little bit more money by buying ringtones now from their media malls.
One way to go around this is to flash the phone's firmware to generic version so that it will be unbranded from the service provider's own, which in your case is Cingular. You can use Phone XS to flash the fw. It's free, but it might take considerably long for the process to finish. Or you can also use services like wotanserver.com and davinciteam.com for flashing. You'd have to buy a credit which costs about 12 USD. The process is really simple and it would only take a few minutes. Also there are basic walkthroughs to help you get started. However, flashing will void you warranty with Cingular, if you have any of course.
Another way to use your own ringtones without having to remove Cingular's fw, and without voiding the warranty, is to just use SE DRM and modify the files. Or you can use a music editor on your PC and cut the desired MP3 down to 30 seconds or less to the section you want to use as a ringtone.
Below is a link to a thread that talks about the same issue. It's about Rogers, but still applies to your situation.
http://cellphoneforums.net/sony-ericsson/t243250-k790-ringtone-unlock-help.html