There is a lot of myth, and misinformation out there on this subject. Rather than spell out a lot of the details, you can read a book I've had for a few years. It covers about every topic you can imagine regarding fat burning, muscle building, how we use energy, how we store it, etc.
The authors name is Rob Faigin, his book is called "Natural Hormonal Enhancement", I'm pretty sure that's the title(it's sitting at home on my nightstand). It basically all boils down to insulin control. Fascinating, and relatively easy to read, minus the many typos.
I think this is his site, it came up under a google search:
http://www.hormonalfitness.com/
Edited to add: A lot of the basics are explained on his site as well. But I think the book is only like $20 or so.