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Event ID: 32026 Source: MicrosoftFax

Fax Service failed to initialize any assigned fax devices (virtual or TAPI). No faxes can be sent or received until a fax device is installed.
From a newsgroup post: "According to your description, I understand that you cannot connect the shared fax on SBS and get event error 32026 and 32068. Based on my research, I suggest we try the following steps to see if we can resolve this issue:

Step 1: Confirm the following settings:
1. Please make sure the SBS server and the XP clients have the last service pack installed including most of the Windows Update packs.
2. Please make sure the XP client is correctly joined to the domain. I suggest you disjoin the XP client from the SBS domain and then rejoin the domain to test this issue.
3. Please make sure the user logged on the XP client is the local administrator of the workstation
4. Please make sure the fax driver on the SBS server is last one.
6. Make sure that you fax modem appears on the Windows Hardware Compatibility List (HCL).

Step 2:
1. In Windows Small Business Server 2003, start Server Management, and then expand Fax (Local).
2. Expand Devices and Providers, and then click Devices.
3. In the details pane, right-click the modem that is used for incoming faxes and then click Properties.
4. In the Rings before answering box, type 2, and then click OK.
5. Restarted the FAX service.
6. Reset the fax modem.
7. Then test this issue.

Step 3:
1. Add authenticated users full control permissions on "C:\Windows\Temp" on the SBS Server.
2. Add full control permission on the folder "C:\Documents and Settings\Local Service" on the SBS server to all domain users".
To remove this message if there are no fax devices attached, uninstall Microsoft Fax services via Add/Remove Programs, Windows components.
Although I haven't found the specific registry entry that causes this yet, I've nailed it down to a key being deleted that controls the TAPI modem. The way to tell if that's the case with your error is to try and open "Phone and Modem Options" in the Control Panel. If it won't open then the problem lies with a deleted registry key.

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