More weight, fewer reps works best.

Personally, when I strength train, I mix it up between high-rep days (10 or more reps with a moderate weight, usually 4 sets), medium days (5 sets of 5 reps with loads that range from 70% to 90% of my max) and heavy days (7-10 reps of singles at higher than 90% of max). The hardest days, mentally and physically, are the high-rep days because it taxes my conditioning just as much as my strength.

The appropriate references supporting this can be found in "Practical Programming for Strength Training" by Rippetoe, amongst other resources.

To really know what's going on, you'd of course have to measure actual body fat lost, rather than just weight lost. Muscles weigh more than fat, some build muscle more easily than others, etc.

Generally I'd say there's a reason most body builders bulk up for months, then spend time dropping excess weight, rather than aiming for a steady increase in muscle mass with zero fat gain.

For the most, my experience is that aiming for slow weight / fat loss through any muscle exercise is also bound to provide some muscle build up. That seems adequate for most people.

The advice I've heard is to build strength and size first, by eating lots and training hard until you have the muscles you're after. Then you can turn your attention to losing fat and maintaining muscle, by eating less (though you'll still need more calories than before, as larger muscles burn a lot more energy even at rest), lowering the intensity of your training, and focusing more on cardiovascular exercise like jogging and cycling.

One requires a calorie deficit, the other a calorie surplus. So do one at a time, but which one depends on you. What exactly are you training for?

Try two things: rowing and push-ups. Rowing is spectacularly good cardiovascular exercise, and once you work your way up to 45+ minutes a day, you'll lose weight fairly rapidly. Rowing does not build muscle, but it does tone what you have. Once you've lost fat and toned up, you might actually like the results. If you don't, then start weight training. Starting Strength, etc.

As for push-ups, they're just plain good for you. Start something like the "hundred push-ups" program.

For your diet, just eat healthy meals and don't obsess with counting calories for now.

Building muscle, without changing your diet, will cause changes in your body that will reduce the impact of what you eat. A pound of muscle takes ~100 calories a day to survive, a pound of fat ~10. It also changes your body in other, more subtle ways.

Serious low-carb dieters (as opposed to people who just binge on meat instead of cake) often do weight-training. (Especially women!)

They eat 11-15 calories/lb of current body weight, with lots of protein, which sustains them healthily and creates a caloric deficit. (And the ketosis helps.)

As with biking / jogging / rowing, I find that a proper weight workout also helps me stay focused after finishing up.

Same experience here. I think people get confused because of how professional athletes are built. The best long-distance cyclists are very light and lean, while the best sprinters have huge lower bodies. Same thing with runners: sprinters are very muscular, and marathoners look like coat hangers covered with a thin layer of beef jerky. That is because of selection effects and professional levels of training, though, and is a misleading way of judging the effect of casual training on normal people with day jobs.

And yes, I know it was a joke :)