Question: So, is there a copyright issue with Ringtones?
Answer: Apparently yes. According to Matthew Courtney, of Nokia: "Every reproduction of a musical excerpt involves payment of copyright fees to the copyright owner". An exception to that is for ringtones consisting of excerpts of old classical pieces or others public domain works.
Some sites make a distinction between ringtones sent by sms and keypress ringtones. They believe sent ringtones incur copyright fees because it is an actual transmission over the air of a melody while keypress codes are only a set of instructions on how to input the melody and thus, do not incur fees.
To comply with the principles of copyright, use public domain melodies as your ringtones or, if you prefer using pop music, make sure that the site does pay copyright fees to the relevant copyright holders.
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