So if you have a traditional fax machine you can connect it to a fixed land line and send faxes the traditional way.
If you want to use Internet fax services, you don't need a fax machine. But you may need a client application on the PC and you surely need access to an Internet fax service (gateway).
"Hardcopy is converted to TIFF or PDF data and attached to an e-mail in MIME format. Then, taking advantage of a connection to the office LAN, data is sent via TCP/IP directly to any Internet Fax on the intranet or Internet. Because they make use of TCP/IP, Internet Faxes do not incur long-distance transmission costs and reception is verifiable." - taken from here.
You can find comparisons of Internet fax providers here and here.
