From Windows XP Help.
Fax provides you with complete fax facilities from your computer. You can configure fax settings, send and receive faxes, track and monitor fax activity, and access archived faxes. Using Fax, you can choose to send and receive faxes with a local fax device attached to your computer, or with a remote fax device connected to fax resources located on a network.
Fax is not installed by default during Windows Setup.
To install the Fax component
Open Add or Remove Programs in Control Panel.
Click Add/Remove Windows Components.
In the Windows Components Wizard, select the Fax Services check box, and then follow the instructions on your screen.
To open Fax after installation, click Start, point to All Programs, point to Accessories, point to Communications, and then click Fax Console.
For more information on using Fax, click Help in Fax Console.
You will need a dial-up modem connected.