Would it be better to work out more or eat less?

Body Composition
A negative energy balance generated by cardiorespiratory activity, instead of reduced caloric intake, and sustained for several months has been shown to result in weight loss that is predominantly attributable to a loss of body fat (Bouchard & Despres, 1995) . In contrast, when the negative energy balance is caused by lower energy intake (through diet alone), one also loses a significant amount of lean tissues, which may be as much as 50% of the total weight loss (Tremblay, Despres, & Bouchard, 1985) .

Resistance training and circuit training studies have shown decreases in body weight and fat mass with comparable increases in fat-free mass (Gettman & Pollock, 1981) . One of the noteworthy benefits of resistance exercise, as it relates to weight loss, is the positive impact of increasing energy expenditure during the exercise session and on maintaining, or increasing, fat-free body mass while encouraging the loss of fat body weight (Young & Steinhard, 1995) . An impressive finding to highlight with resistance training is that the energy expenditure following higher total volume workouts appears to be elevated, with an increase in fat utilization (due to a lower respiratory exchange ratio) during this period (Melby, Scholl, Edwards, & Bullough, 1993) . The evidence unequivocally supports the combined use of aerobic exercise and resistance training for optimal changes in body composition to successfully attain weight management goals.

http://www.unm.edu/~lkravitz/Article folder/aerovsresist.html