I'd take this up with who told you this would work. It's been years since I had to do this since fax died years ago in our area but we obtained the WinFax API and use some Visual Basic code to send out said fax blasts. Even with all the code under our control we found it to hang on some numbers which we had to tailor our system to not call those and do those manually the next day.
You can imagine that there are still those that think this stuff should be push button and off the faxes go. The truth is not accepted widely about this.
But there are ways and that is to have it done for you. There are fax companies that will take your stuff and send it for you.
I recently installed Office 2003 because I was told that it had the ability to fax-merge (similar to mail-merge but once the individualized letters are created they are automatically faxed to all the recipients). While I can fax individual letters from my computer, I am unable to figure out how to get fax-merge to work. I have a Dell Dimension 8100 and Windows Xp.
I followed the steps in http://support.microsoft.com/kb/306550 to be sure that my fax was properly installed and enabled. I tried the workaround suggested by MicroSoft at http://support.microsoft.com/kb/282550/en-us but it didn't help. I also contacted resources at allexperts.com and still was unable to get an answer.
If anyone has successfully used merge fax, or can provide other suggestions, I would really appreciate it.