Search for fax in the Market, or better yet on AppBrain. There are a few solutions. Mobile Fax lets you fax documents using your phone's camera. Others will need you to convert the doc to pdf and transfer it to your phone first.
Or you could just bypass the phone altogether. If you have a scanner there are several online services that will allow you to fax doc or pdf files. Some will let you send a limited number of faxes for free, sort of.
FaxZero.com will let you send up to 2 three page faxes a day for free. The caveats, you have to jump through an email confirmation hoop and the recipient will receive a cover page advertising FaxZero's services. I've tested this service for my mother and it works well enough for the occasional fax.
There are others. Maybe someone else has a favorite.