I think authors of erotica might say that the difference between the two is the presence of storyline and character development in erotica as opposed to just presenting a sexual tableau for the reader.
Both are supposed to arouse the read, but erotica wants to achieve more than just arousal, it wants to allow you to develop a rapport with the characters, to give the events of the story meaning.
Anyway - I'm blah blahing a bit because I've struggled a little with the difference myself.
The next distinction would be the difference between erotica and fiction that happens to have explicit sex scenes.
Regards
Caleb