Tried taking a .mp3 and clipping it off at 15-20 seconds.

Then uploaded it to my server, for example, www.mydomain.com/song.mp3

Tried to access that from the BB, and it would not work. Is this how you get the song to use as ringtone? Or am I missing something?

Yup either that way or by this way:
http://www.blackberryforums.com/ring...-yourself.html