How do I setup internet fax myself if i do not want to use commercial fax service like efax?

I am starting up my own business, and I need to set up a Fax number to receive and send faxes. At my previous job we actually used Fax by email and we really had no problem with it at all, to be honest I only used it once or twice when I worked there but others used it daily. I do not have that much experience with it and this is why I am asking if Fax by email is the same as faxing through a fax machine in my home office? Are there advantages and disadvantages when using Fax by email? Am I better off using one more than the other? The reason I ask is that I have a fax machine that was given to me so if I need to use it all I need to do is set up a fax service with my phone company but I have heard a lot about Fax by email. From what I understand you can send and receive, keep files stored in folders, etc. when using fax by email which is very helpful when keeping track of all your incoming and outgoing faxes. I have always used a fax machine to send and receive faxes, but now that there is the option of using Fax by email I want to be sure which one would be better for me to use for my new business and which one is less expensive. Is fax by email more expensive than faxing with a fax maching?

Any information regarding Fax by email or Fax by fax machine would be highly appreciate. Advice on which way should I go and which way would have more advantages than disadvantages would be great as well.

Thanks for your time and help.
Be sure to check out www.sunsetsupplies.com , its under construction right now but should be up in about 3 weeks. I will be selling all types of Office Supplies from Electronics to Pens, you need it we got it.

I have send a fax that require a cover sheet. I sent it from an online fax service.
I uploaded the cover sheet and faxd it, and then uploaded the document and faxd it.
I got the respound that they only got the document.

is there is a special way to send a fax with a cover sheet?

I need to send a fax. I have a scanner and can scan the document onto my computer, but I don’t know how to fax it. Is there anyway I can do it through the internet with my home computer? I’m using Windows Vista, and don’t want to pay for a fax service since I would probably only use it this once.
Thanks