HTC Hero (CDMA)

Same problem here.

I found an article on google somewhere that described the need to create 3 folders on the sd card you are using. right at the top level if you create "alarms notifications and ringtones" Place your files in the appropriate folder and it should work as needed.
I'm Not sure if the ringtones you downloaded will work. I had some old .qcp files I made for my last phone and they did not work but it does play wav and mp3 files flawlessly.

I use Zedge but its only their library of tones. On the other hand, there are thousands of tones & wallpapers too.