The most common initialization problem is that fax uses the wrong command for S/W flow control. The process fax uses for determining the reset and setup commands is described under the documentation of the fax registry keys, and in particular the ResetCommand and SetupCommand entries, in REG.DOC.
Windows 95 and NT-SUR issue the ResetCommand string before every answer. This causes problems with certain modems, because these modems return ERROR in response to ATA if they have a zero internal ring count (which they do immediately after issuing the default reset string). Microsoft will fix this in the next version of NT and Nashville.
Most of these problems can be fixed on a per-modem basis by appropriately overriding the ResetCommand and SetupCommand entries via the modem's INF file.