Here is a nice explanation (using Scheme): http://www.cs.brown.edu/courses/cs173/2002/Lectures/2002-10-28-lc.pdf
And here's a nifty bit (from my blog), reducing recursive factorial to pure lambdas:
http://blogs.msdn.com/b/ashleyf/archive/2008/12/03/the-lambda-calculus.aspx
Have fun!