I got this message as well today. I noticed if the youtube video has "embedding" disabled by request it fails. Which kinda makes sense, but isn't always obvious (to the end user).
hope that helps (look for an alternate version of the song you want that has embedding enabled)
I have tried several times to convert a youtube video to a ringtone and I keep getting an error. I have copied and pasted just like the instructions said and i have used three different computers and internet explorers and still get the same thing. Any Help out there?