Wow you have a lot of questions.
How do you give the form to recommenders who are long distance?
Can you sign and fax the form?
Do you just snail mail it to them?
I would think fax or mail would be fine. Mail may be better if time is not an issue, in case the pages gets distored at all via fax.
Also, this recommender is completely clueless but he thinks he knows what to do and is telling me what to do, Would you still use said recommender or just keep them in case of waitlist?
Can you be more specific?
oh and another thing, how do you pay for their postage just include a roll of stamps?
A self-addressed stamped envelope included in the packet will be fine, and the most professional way.