T-38 is a protocol designed for fax over IP. It is an open standard so it should be used when faxing to any non-avaya equipment. T-38 is a form of relay which means that when it sends fax tones, it sends a message to the distant party who then re-generates the tone locally.
Relay is Avaya's propritary relay and can only used when faxing to another Avaya system.
Pass-through does not send messages, it simple transports the fax tones within the RTP packet. This makes it suceptible to the same types of issues that voice over IP has such as jitter, packet loss and delay. Fax tones are mor sensitive to these things than voice so Pass-through isn't typically the best option. Also then using pass-through, you have to use the G.711 codec.