QUOTE(Kefka @ Feb 20 2007, 05:51 PM)

Yeah you can. I mean, it's not as effecient as focusing on one or the other, but when I was fat, and then changed my diet and started working out (simply with weights, no cardio), I both lost fat and gained muscle. Or turned fat into muscle. I did something that made me weigh less and have more muscle, which leads me to believe... Weights are so much cooler than cardio. For everything. And manlier.
Nope! You can, though, get stronger without gaining muscle. In fact, your biggest gains will come from your body adapting to any given exercise. Muscle growth is a fairly slow process. As you lose fat it will look like your muscles are growing but that's just because the fat obscuring the muscle is going away.
The human body generally doesn't like to have very much muscle mass. Storing energy into fat cells is seen as a better option. When you have a surplus of calories, your body will only build muscles if it believes it needs them. Otherwise it'll all go into fat. Lifting heavy weights fulfills this need and will put some(Not all) of the excess of calories into producing muscle mass, as is needed.
When you have a deficit of calories, the first thing your body will do is to liquidate unneeded muscle mass. By lifting while dieting, you prevent a large amount(Not all) of your muscle mass from going to waste. This is the most important reason to lift while dieting. Unable to meet the amount of calories needed to function, the body will start to break down its fat cells for energy. It will only break down enough fat to fulfill normal biological functions, not to build muscles which would consume even more energy.
Growth and loss are completely separate. Even when losing/gaining weight slowly, you'll end up effecting both fat and muscle at the same time. Lifting helps you lose or gain the right thing.
Also, fat can't turn into muscle, or visa-versa.