You install Ringtone Creator Java library like an ordinary Java library – put it into your CLASSPATH. If you decide to put it into your $JAVA_HOME/jre/lib/ext, please keep in mind that you will have to upgrade the library at this location every time you upgrade, and whatever you put into CLASSPATH won't be used if you put this library directly into your Java installation.
If you're interested in installation of Ringtone Creator Server, please refer to the corresponding part of the documentation on this web site.
Ringtone Creator 2 requires Java 1.4 or higher to run.