Eating too few calories? Muscle loss possible?

Hey guys, I've been pretty strict the last week and lost a considerable amount of weight (8 pounds - first week starting back and it always goes quick, it'll likely slow down in the next few weeks to come). I've been switching between all of my Jillian Michaels DVD's and I'm totally addicted to the endorphins again. I feel my body changing shape, but not necessarily getting smaller (not yet anyway!) and I've been eating well, I think. I'm taking in between 1500 and 1800 calories a day, but with exercise I'm only netting between 1000 and 1200. Is this enough? I've heard about people eating too few calories and burning up muscle instead of fat. I wonder if it's possible this could be happening. If anyone could shed any light on this, as I don't understand much about muscle. I don't want to bulk out or anything, but I want to be strong and lean :P

Any info would be appreciated!

Thanks guys!