I did the weight watchers point system and I hit the gym, hard. It was great to lose the weight but I lost some muscle along the way. At one point I was only consuming 1200 calories a day. Stupid.
I do WW, too. I'm down 35 pounds so far. I weigh in tomorrow and hopefully broke that 35 pound barrier. I think I did, because my pants are just falling off of me.
I did the same thing. I was losing weight at around 15-1700 cals and some exercise and went down to 1200 and upped the exercise only to find that my weight loss stalled, I felt like crap and got really discouraged.
I know better now. Yes you need to cut calories, but you need to be careful.
My plan now is to aim for around 16-1700 cals A lot more protein, weights and HIIT. On days I am not weight training I will do LIGHT runs at around 5mph for about 1/2 hour.
The key is consistancy. But it is also an art and a science losing weight and getting/staying fit.