You will see six .caf files in there called sms-received1.caf through sms-received6.caf. You need to replace these .caf files with your own .caf files. In order for you to get your m4r to a .caf file, you will need to convert them. CAF is a renamed AIFF file (*.aif). iTunes can convert any file imported into an AIFF if you go into preferences/general/importing and select the AIFF encoder. Then just rename the file to the proper *.caf file you want to replace and SSH it to the phone.
Ok. I have a m4r file that I have renamed to "sms-received1.caf". When I click and drag into itunes under the ringtone category it does nothing. Obviously I am doing it wrong. I also read that you can right click it in itunes and convert it to aiff or whatever and it doesnt give me that option. I have searched tons of forums and looked for various converters but nothing works. Thanks.