There are different types of modulations that can be used with modems, similar to those used by radio stations, ie: Amplitude Modulation (AM) and Frequency Modulation (FM). The types of modulation are based on the characteristics of the carrier wave which is changed to encode the information. The three main characteristics of a wave that are used for modulation are: amplitude, frequency and phase.
Amplitude modulation is the changing of the strength or the loudness of the carrier to transmit information. In this type of modulation it is only the amplitude of the signal that changes, the frequency and phase remain the same.
This is the simplest form of modulation; however the strength of an analogue signal can vary easily due to the nature of the medium.
Frequency modulation works by representing data as different frequencies on the communications link, eg: a zero could be represented by a frequency of 250 Hz and a one by a frequency of 500 Hz.