You need a regular dial-up modem, some fax software, like Hylafax, and to pay the cost of the phone call for sending the fax. You don't need to involve an ISP at all.
WnFax is your answer. It is a software that uses the internet to send your fax to a fax machine much like a voip telephone sends voice through the internet and it also will recieve your fax and put it in your email box a really great home office solution, and takes up a lot less space than one of those scanner/printer/fax machines.
If your are using XP pro you can send a fax but you need to install the software at the control panel/add/remove programs and then add/remove windows components. You will also need a modem of course
Only Vista Business and Enterprise has this feature.