Evangelical originally referred to protestant churches in general, excepting those that were Catholic in all but name - that is, the ones without assigned "sales territories" were evangelical. This meant successful churches had to "evangelize" in order to grow the flock, and in a nation where almost everyone was already attending one church or another, this meant churches became successful by attracting people away from other churches, often of the same faith. Much marketing, entertainment, and socializing ensued. When "hellfire and brimstone" sermons were in fashion, evangelical churches might seem very conservative if you judged by their sermons, but that was just the fashion. The term has become non-technical over time, but still means "working to attract new membership" as it's core. That's the sense in which people speak of "an evangelical Pope" - no longer an oxymoron as it once would have been.
Here's a long-winded piece on the distinctions. http://www.patheos.com/blogs/r... I think the following captures the distinction well:
The distinctive hallmarks of post-1925 fundamentalism are 1) adding to those essentials of Christianity non-essentials such as premillennial eschatology, 2) âoebiblical separationâ as the duty of every Christian to refuse fellowship with people who call themselves Christians but are considered doctrinally or morally impure, 3) a chronically negative and critical attitude toward culture including non-fundamentalist higher education, 4) emphatic anti-evolution, anti-communist, anti-Catholic and anti-ecumenical attitudes and actions (including elevation of young earth creationism and American exceptionalism as markers of authentic Christianity), 5) emphasis on verbal inspiration and technical inerrancy of the Bible as necessary for real Christianity (including exclusion of all biblical criticism and, often, exclusive use the KJV), and 6) a general tendency to require adherence to traditional lifestyle norms (hair, clothes, entertainment, sex roles, etc.).
My grandparents were fundies in that sense. The perhaps surprising thing was, they weren't all that devout - they never really talked about church except on Sundays, and while their morals were certainly set by this, it wasn't their main hobby. Still, in any discussion of religion, they had great certainty, and they went to a church that emphasized literal interpretation, witnessing to spread the faith, and the like. Really creeped me out when I would go there as a kid when visiting them.
Fundamentalists point to Lakewood Church as the example of the distinction from their side. A church that most would consider evangelical, that "rarely mentions Jesus, and never mentions sin" (to quote from a fundie rant), that is incredibly successful by any objective measure, mostly by avoiding everything quoted above and focusing on an entertaining and uplifting social experience. It's a pattern followed by many evangelical churches, often described as "up with people! and, by the the way, Jesus". This is religion with solid mainstream appeal. Fundies are generally a subset of evangelicals, but they don't like to see it that way, as separation from churches like Lakewood is a big deal to them.