OTJM has quite well explained the distinction.
I will just add that, by the norms, the homily today is to be based on either the scriptural readings (the homilist may focus on one or several passages from the readings) or he may base it on a liturgical text used at the Mass being celebrated. He could, for example, make the basis for his homily be the Opening Oration or the preface of the Eucharistic Prayer.
It can happen still that the bishop will command that a pastoral letter of his be read at all Masses in his diocese in place of the homily. That, of course, is his right since he is the moderator of the liturgy in the diocese he governs.
Sermons had a much broader latitude. One could, for example, preach on a theme for a series of Sunday Masses and develop that theme across the span of time. The sermon in the vetus ordo Mass was also not seen as integrated into the liturgical action. That is why, for example, we would remove the maniple before giving the sermon and put it back on after or why the sign of the cross was made before and after the sermon. It was an opening and closing of parenthesis.
