Also known as a WinModem, this is a cheap type of modem that is compatible with windows 98 systems, but not yet with linux. It is cheap because it cuts down on hardware by farming out some of the DSP and compression work to the CPU of the actual computer, rather than doing everything on the card. This saves on space, but can eat up a bunch of processor cycles. If all you're doing is looking at web pages that have no java, this may be OK. If not, you want to go with a hardware modem.

If you don't want to buy a software modem, then buyer beware! The boxes software modems come in do not advertise this fact, but usually leave it in the fine print. In one case at Fry's, I had to open one of the suspiciously cheap boxes while none of the clerks were looking and take a look at the install CD, which was the only piece of material on or in the box that had the words 'software modem' on it.