Confused - Skinny Fat and Toning

there is no such thing as "toning", muscles can do two things, get bigger or smaller, the toned look is a result of low bodyfat which reveals the muscle, you should do heavy weights while in a caloric deficit and eating sufficient protein, this will make you maintain what little muscle you have while your body drops fat and you will become more "toned" as the muscle gets revealed, it is very hard to gain muscle and lose fat at the same time but possible if you are a complete beginner and not in a huge deficit, however you should focus on one at a time though, treat any muscle gained on a deficit as a bonus and don't expect it, also you should be lifting heavy weights (5-12 reps) not low weight high reps if you want to maintain muscle on a deficit.

essentially you lift while losing weight to ensure that most of your loss comes from fat and very little from muscle so that at your goal weight you will have a lower BF% than you would have had you not lifted. You can also get stronger without gaining muscle by going this and conditioning the muscle you already have while strengthening your central nervous system.

Thanks everyone, I think I get it now and the reasoning behind it all. Sometime reading too much confuses you more!! Off to the gym to day for some heavy weights...if I have to start at 5 reps so be it.

Couple more questions? What about abs? Also, what are some good quick proteins to eat...I am literally always on the go and try to not eat processed food as much as possible...I end up eating a lot of hard boiled eggs since they are quick and easy.

You start at 5 reps, and stay at 5 reps. You goal is to increase the weight you're lifting, not the amount of reps. Compound lifts are probably the best core work you can do, you don't really need to do workouts to target your abs.

If you're new to a heavy lifting program, I'd greatly recommend you get the Starting Strength book. It has the 3x5 program (which Stronglifts ripped off for the most part). But, most importantly, it discusses in great detail the importance of form -- to maximize your progress and avoid injury. Because when you get up to the heavier weights, if your form is off, you can really hurt yourself.