With Fractal Fighter you might want to make the ship adapt itself during combat. Changing itself to better fight the enemy and protect itself from their attacks and the environment. Could be simply time based for each encounter or could be reactive. Make it appear that the ship is learning and adapting (redistributing it's power points). Might want a way for the pilot to request a previously adapted form (if he knows he's going to fight Slugons rather than Blastons for example).
Evolution would be a more gradual process that increased the ships total power and enabled new adaptions. Be careful not to end up in a situation where you have to start making rediculus power ups just to win the next fight.