just dont understand!!

the 1200 accounts for what your body needs to survive day to day. you should NOT ever go below 1200 net calories. now, if you exercise off say 300 calories... you need to eat that same amount, to bring your net calories consumed for the day back to 1200. (otherwise, your body will think you are trying to get it to function on only 900 calories.) does that make sense? it is late here and i'm going to bed so i apologize if it doesn't! search the forums - there are tons of great threads on this same subject! good luck!

The 1200 given by MFP is a calculation of what your body burns in a day (just by beating your heart, working your brain, your daily activities, etc) minus about 300 calories, depending on your weight loss goal.
When you exercise you burn extra calories. This not only boosts your metabolism (which is why it asks for activity levels etc before calculating it all) but burns calories as you do it. So if you eat back the calories burned during exercise, you're probably still pretty close to a 300 calorie deficit. This is enough to loose weight at a healthy rate (about a pound a week or so).

It's ok to not eat back all of your calories from exercise every day. Just make sure you're not at too much of a deficit consistently, that can slow the metabolism down.

Also make sure you are getting enough calcium, iron, and other nutrients. When we cut our calories down as low as 1200 it makes it harder to get everything we need from the food we eat (unless we are very good!). A multivitamin might be helpful. If you get deficient in certain nutrients your energy levels can really drop (especially iron and B vitamins) or you could end up losing bone mass (calcium, vitamin D) or take a hit in your immune system (vitamin C), etc.

at 1200 or slightly less you will be in a state of burning weight/fat - the goal is to burn more than you need - your body as a female I think burns 1600 daily if you did absolutely nothing - in the past you propably ate 2,500 calories a day for example - the excess 900 calories is not needed and therefore the body stores it as fat for future use - so by sticking to a calorie count (food consumption) that is less what your body needs for the day, the body is forced to search for energy from stored fat ( some times muscle) -

If you eat more than what you need you gain weight
Now, when you exercise, your body burns calories (energy units) - so for example, you burn 400 calories doing a 50 minute treadmill exercise, your body now not only needs the 1600 but an additional 400 making it 2000 calories - if you still stuck eating the 1200 calories recommended, you trigger starvation mode - this is unhealthy and therefore its recommended that you eat food worth 400 calories ( what you burnt during the exercise)

Now 1200 in my opinion is high for a female who wants to lose weight - I am currently 6'2 tall and 230 pounds - the site recommends 1550 for me but I try to stay 200 calories below that -

you need to learn about your body and its needs
General tips
1- Eliminate simple carbs such as white bread & white rice ( simple carns are one molecule broken fast into sugar and diverted as fat)
2- Stick to whole wheat and brown food (complex carbs)
3- Keep your very much needed carb intake closer around your work outs cause you need the energy and you will burn it faster
4- Dont eat just before going to bed unless its ultra healthy
5- you must drink lots of water 9 to 12 glasses
6- if you work out please use a multi vitamin for active women
7- Vitamin B100 complex is excellent

During your journey, you will lose fast at the beginning but you will hit ceilings which is ok - just keep working
During the journey, you will experience fluctuations in your weight up and down - thats normal as the body holds water at times
or food is not fully digested or released still

as time will pass, you will learn more and figure it out - remember to celebrate each small victory and focus on the day to day tasks at hand and that is simply
1- Eat less carbs
2- Eat wise
3- Get your body moving

But most of all, do not give up and when you fail at times going on a bing, just let it happen but get up next day and go for it
- dont forget to incorporate a cheat day in your diet like once every 8 days have a meal you realy like but dont go insane lol

Enjoy