Not long ago, fax modems were exotic, expensive, cutting-edge technology. Today they're standard equipment on many home and small business PC packages. In fact, it's hard to find a modem today that doesn't have fax capabilities built in.

Unfortunately, many users who have fax modems ignore their fax capabilities, passing up a handy, dual-purpose tool. Others buy fax modems thinking that at $100 to $200, they're cheap substitutes for an honest-to-goodness fax machine, which is not the case.

Most fax modems today have two functions. They can operate as standard modems for normal communications. They can run as fast as 14,400 bits per second (bps). That's the equivalent of 1,440 text characters a second, or enough to fill a computer screen in a second and a half. You can still find cheap modems that offer standard communications at only 2,400 bps, but the cost of high-speed communication has come down so quickly that the increased performance is well worth the extra money.

In addition to standard modem innards, fax modems have chips that emulate the transmission and receive circuitry in standard fax machines.

There's a big difference between the two types of communication, even if they're packaged in the same modem case. Let's say you're collaborating on a report or book with someone in another city. If you're using the same word processing software, you can use a standard modem to send the actual file you're working on. Your correspondent can call up that document, make changes, and send it back.

When you fax a document, all you're sending is a picture, a collection of dots that means something to you because your brain is smart enough to turn them into words and numbers. But those dots mean nothing to your word processor. Some high-end fax programs include optical character recognition software that can turn those dots back into usable text for your application programs, but the process is tedious and inaccurate at best.

In facsimile mode, fax modems also differ from desktop fax machines in the source of the images they send and the destination of the images they receive.

A desktop fax machine actually has three parts. There's a scanner, which converts documents into digital images; a telephone and facsimile modem that transmits and receives those images, and a printer that reproduces the image on paper. No matter how much you pay for a fax machine, the basic technology inside is the same. That's why different brands of fax machines can talk to one another without so much as a hiccup.

Instead of scanning existing documents, fax modems get their images from your computer. For IBM compatibles running older DOS programs, this presents some difficulty. Memory-resident DOS fax programs chew up memory, and because they lack font recognition technology, the output on the other end often looks as though it came from a cheap dot-matrix printer.

For PCs running Windows and for Apple Macintoshes, fax modems are far more useful. That's because the fax software is installed as a printer driver -- a program that tells the computer's underlying software how to communicate with a printer.

When you select the fax modem as your printer and print a document, your software will typically pop up a screen asking you for the phone number of the receiving fax, or allow you to choose the number from a dialing directory. The program will dial the number and send the document with no further intervention.

But there's a big difference at the other end; in fact a document faxed directly will look like no other fax you've ever seen. Your software essentially treats the receiving fax as a 200 dot-per-inch printer. Whileit's not quite up to laser standards, your document will come out with its fonts, graphics and logos sharp and intact. By eliminating the middleman -- the cheap scanners built into most fax machines -- your fax modem delivers remarkable quality.

This has made fax modems a favorite with travelers using laptop computers. If you need a printed copy of a report stored on your PC, all you have to do is fax yourself a copy at your hotel or business destination.

Fax receiving software typically runs in the background, alerting you when faxes come in. The faxes can be stored on your disk, viewed on screen or printed. Some users like this because it saves trees. They can throw away junk faxes before they're committed to paper.

Fax modems generally come with basic software to make them work their magic, although more sophisticated fax programs provide more flexibility. Elementary fax programs may let you do little more than set up a phone directory of fax numbers, and that may be all you need. More sophisticated programs will automatically send the cover page of your choice, transmit a scanned signature at the end of your document and allow you to set up groups of phone numbers for mass fax broadcasts.

Now the downside. Not every document you'll want to fax will be created on your computer. You may want to send a copy of a report from another department, a magazine article, a drawing or diagram, or a copy of Aunt Rhoda's chocolate cake recipe. The only way to do this with your computer is to buy a full-page scanner -- at $700 to $1,500 -- and then master the scanning software.

Likewise, a fax modem is no substitute for a shared fax machine in an office environment where many people need to send and receive documents. And for those who receive faxes at odd hours, I question the wisdom of leaving a $2,000 computer running around- the-clock to save the expense of a $300 fax machine.

Even with these limitations, fax modems are good buys, particularly for owners of Macintoshes or PCs running Microsoft Windows. While they're not complete substitutes for regular fax machines, they're convenient for sending documents created on your computer.

Michael J. Himowitz is a staff writer for The Baltimore Sun.