The words have been corrupted in an awfully Orwellian fashion, too. When Dole was being lambasted by his own party, Goldwater commiserated about how ridiculous it was that the two of them had come to be seen as examples of liberals within the Republican Party.
Mongrel's got the gist of the definitions, old versus new, but in practice, at least in America, the terms are practically meaningless. There was really nothing conservative about Bush, and there's not a whole lot liberal about Obama.
"Fiscal conservatism" theoretically means laissez-faire capitalism, an unregulated free market where businesses succeed or fail without governmental intervention. In practice, American Republicans support a system that grants corporations special rights above and beyond those of individual citizens, and support massive corporate welfare when they have power while loudly decrying it when they aren't. Oh, and also, declaring very expensive wars with nations that are no threat to you is considered "conservative" according to the modern American definition, even though that's pretty much the farthest thing from the dictionary definition.
Meanwhile, "liberal" is effectively a dirty word that American Democrats scurry away from; they will bend over backwards to prove how not-liberal they are, because they still have not figured out that they could all line up to suck off Reagan's corpse and Republicans would still call them Leninists. Take the healthcare bill -- it's incredibly corporate-friendly, and not government-run in the slightest, and in fact is far from what UK Conservatives would ever consider, but American "conservatives" have called it socialist and suggested it is a total governmental takeover of healthcare.
"Socially conservative," incidentally, is a euphemism for racism, sexism, and general WASPs-are-better-ism.
And, as in the fiscal arena, American Democrats flinch at the slightest hint that someone might describe them as "liberal" and back only slight reforms. Pop on over to the Prop 8 thread for some good examples -- take Obama's ridiculous stance that gay people should have all the same rights as heterosexuals but oh yeah for some reason I oppose gay marriage, because that's politically expedient.
Basically, it's all a crock of shit and the words have lost all meaning.
I'm an unabashed liberal but acknowledge that conservatism has its place -- sadly, neither is really in evidence in our government. What we've got is more like a corporatist system: the government is run by people who have enough money to influence politicians, and everything else is window dressing.
