I have always wondered who exactly is the underking?

Zurin, Wulharth, or both. Take your pick.

its a title:

http://uesp.net/wiki/Lore:Underking

This.

Is it possible that when they both became part of the oversoul Talos, that they both adopted the title in history? They're both referred to as the Underking.

I think Wulfharth and Zurin were combined into one entity before becoming part of Talos.

Oh yea I think you're right. "The rotting undead wizard" mentioned in the arcturian heresy?