I use the Australian iTunes Store, and I receive an iTunes connection error message 11556 every time I attempt to create a ringtone from content purchased through iTunes only minutes before. Although I have found the discussion topics in iPod and iTunes discussion forums unhelpful, I did find a clue. It appears that the Australian iTunes Store does not support ringtones at this time.
I have been going around in circles for days trying to figure out why I receive this error message, and this is probably the answer closest to the truth.
Like you, I am using the latest version of iTunes (8.0.1.11) and have downloaded iPhone update 2.1 on my iPhone 3G. I have an active iTunes account that allows me to purchase content.
It would be very helpful if an Apple Support staff member monitoring the forums would prompt someone to address this issue, and inform us as to precisely what the status of creating ringtones in Australia, and other parts of the world, currently is.