The standard technique for routing these packets through your modem is called the Point-to-Point Protocol (PPP). The basic idea is simple -- your computer's TCP/IP stack forms its TCP/IP datagrams normally, but then the datagrams are handed to the modem for transmission. The ISP receives each datagram and routes it appropriately onto the Internet. The same process occurs to get data from the ISP to your computer. See this page for additional information on PPP.
If you want to know more about modems, protocols, and especially if you wish to delve into things like PSK and QAM in more detail, check out the links on the next page!
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