In the very earliest days of LaTeX 2e, the only way to use the T1 encoding was t1enc; with the summer 1994 “production” release, the fontenc package appeared, and provided comprehensive support for use of the encoding.
Nevertheless, the t1enc package remains (as part of the LaTeX 2.09 compatibility code), but it does very little: it merely selects font encoding T1, and leaves to the user the business of generating the character codes required.
Generating such character codes could be a simple matter, if the T1 encoding matched any widely-supported encoding standard, since in that case, one might expect one’s keyboard to generate the character codes. However, the T1 encoding is a mix of several standard encodings, and includes code points in areas of the table which standard encodings specifically exclude, so no T1 keyboards have been (or ever will be) manufactured.
By contrast, the fontenc package generates the T1
code points from ordinary LaTeX commands (e.g., it generates the
é character codepoint from the command \’e).
So, unless you have program-generated T1 input (which is almost
inconceivable), use \usepackage[T1]{fontenc} rather than
\usepackage{t1enc}.
This question on the Web: http://www.tex.ac.uk/cgi-bin/texfaq2html?label=t1enc