bmacd,
Ignore the fad diets.
I just did what you're doing, but I was a little more out of shape. In the past year I went from 210 lbs to 180. My waist went from 35" to 31." My body fat % was seriously reduced and the trainer at the gyms guesses that I lost around 50lbs of fat. I'm much more vascular and muscular now, and you can see the majority of my abs (with the exception of right below my belly button... but I'm old).
This is what I did:
I followed the "couch to 5K" program at coolrunning.com. It's very easy, is only 20 minutes, three days a week, and it gets you into shape fast. Just 9 weeks. The fat just melts away.
On top of that, I worked out at the gym 4 days a week to gain muscle mass.
I used a "push/pull" program that works the chest, triceps and quads one day, back, biceps, hams and calves the next with wed, sat and sun off. My workouts at the gym lasted between 1 and 1 1/2 hours.
My diet change was far from drastic. I already was a water drinker and shunned sodas. All I did was stop munching on chips, bread and crackers and started using apples and banannas as munchies. After the first month, I had to actually increase my calorie intake (eat more) because I was running out of energy in my workouts. Even now, after doubling my calorie intake, I'm STILL shedding fat and gaining muscle.
I also cut fried foods (fries mostly) out of my diet, but that was because my father's side of the family has a history of heart problems and stroke. I'm getting old and cautious.
I've even shortened the frequency, length and intensity of my cardio workouts recently so I can gain more muscle mass. And even with that, I'm not gaining any fat, I'm still losing a bit.