Why no "Create AAC version" option?

Using several online tutorials as a guide, I'm trying to use iTunes 10 (Windows XP) to convert a 30-second mp3 file into a ringtone. The tutorials say that even in 10, I should be able to right-click a song and have "Create AAC version" on the context menu. As you can see by the enclosed screen capture, that's not apparent. I was suprised by the "Create MP3 Version." I configured iTunes to reference existing mp3 files. I've heard that if I let it copy added files to the iTunes library it will convert them to AAC files, so I unchecked the copy-to-library option in preferences long ago. Any tips on how to create an AAC from iTunes?