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The additional cost to get fax capabilities with a modem is minimal, and it's a good investment. This is a suitable solution in most cases, though it doesn't always work well for graphics-intensive faxes. The cost for a "plain vanilla" but workable fax machine is quite low; prices have dropped considerably, so if you really need it the extra cost isn't very much. 
 

ISDN (Integrated Services Digital Network) is a kind of phone service offered by most local telephone companies. It has many benefits, but most important is the ability to carry one voice and two high-speed data or video communications channels over existing copper wire in the home. This generally means there's no need to install new phone lines to give telecommuters the separate voice and data lines they often need. The cost of ISDN service is generally less than the equivalent number of separate lines. However, ISDN is not universally available in all countries; thus, telecommuters and their employers can't always get access to it when needed. Also, there are one-time equipment costs for the special phones and for the devices needed to connect PCs to ISDN lines. On balance, it's a technology that should be considered but may not always be available, or cost- effective even if it is available. 
 

It should be based on what they need and use in the office. In general, you'll want to make it easy for telecommuters to do as much of their job remotely as they need to do. If they have access to three LANs in the office but can only access one remotely, that could be a big problem - and could severely limit their effectiveness.  

Fortunately, the technologies for remote LAN access have been steadily improving, and the vendors that provide them are working hard to continue this trend.