| Building muscle, burns fat.
Do circuit training and alternate between cardio and lifting weights, it will both help you build muscle and shed fat. But don't rely on the scale to tell you how you're doing, because you most likely won't see a significant fluctuation in weight, because the added muscle will pretty much cancel out the fat lost in weight.
Also, don't expect quick results. The most important thing is to stick with it, even after you've met your goals. Instead of thinking "Okay, I'm going to lose this much fat and gain this much muscle in the next 4-6 months," think "Okay, I'm going to eat healthier and exercise for the rest of my life."
The important thing is to stick with it, and not get discouraged by unreasonable goals. | 
