I don't know what your instructor means by "too much" or what kind of weight lifting. I think it depends on what your goals are for lifting the weights. Maybe the guys who lift weights to sculpt their bodies into a certain look for shows would have more trouble moving in a fight? I dunno.
From my own personal experience--adding strength training to my routine has improved my martial arts abilities. What I mean when I say "lifting heavy" is lifting weights heavy enough to push myself to my limits instead of sticking with a lighter weight that I could work with longer. I want to use weights heavy enough that I can only do about 8-10 reps in a set. If I can do 12 reps with a weight, it's time to increase my weight. Pushing myself to lift heavier has increased my strength over all and has added power to my techniques. Almost everyone who has been my uke in the past year has noticed and commented on it. "What have you been doing?!" :laugh:
My art also emphasizes low stances, and strengthening my leg muscles has helped me to be able to move faster and stay balanced while staying low. We practice being able to take a fall, to fight from our backs or from a sitting or kneeling position, so strengthening my core has enabled me to move more quickly in these situations.

So I guess in general, I would say that while trying to achieve a certain look might not profit much in a fight situation, improving strength can be very beneficial.

I read a lot of hype on "heavy lifting" people go on about it like its something special. I have asked my current boxing instructor and a professional strong man, they both say that weight lifting is counter productive to our sport. Although light weights or even kettlebells is more productive to the sport. I was also told by my professional strong man friend that people who pump iron too much aren't as strong as they look its all glamor and not much else. What does every one think of this?

You have to remember - there's a difference between power lifting and body building. Body builders go entirely for hypertrophy (building big muscles) and aesthetics, while power lifters and other types of lifters are going for strength, power, etc.

I suppose there can be a point where your weight lifting starts to become counterproductive, but from what I've seen, that takes quite a bit, and perhaps something only the guys really need to worry about (as women can't really build muscles big enough for them to really interfere, unless they're on something), and even that would require a ton of time, effort, and energy (probably too much for most people to feasibly do while also seriously practicing a martial art). I think the more realistic issues are not getting enough rest, and not having enough time to do both.

I'm with bushidomama on heavy lifting being helpful to my art (which, like hers, is a lot of grappling/ground work). It might be different for a more strike-heavy art, such as karate or tae kwon do, but for the arts that are more focused on grappling, throws, etc (Jujitus, Judo, Aikido), I don't see how it can do just about anything except help. For example, learning to deadlift has allowed me to body slam my opponent, because it taught me both lifting form and has built my strength.

The biggest issue I've run into is overworking myself. A lot of beginning lifting programs assume that it's the only workout you're doing, or you're doing a little bit of light cardio. Heavy lifting 3x/week, plus 1-2hr of martial arts 2-3x/week on opposing days, was quite a bit too much and didn't offer enough rest in between. Make sure you focus your lifting routine to be a supplement/complement to your martial arts, and you should be fine in that regard.

Second to that, I can see where doing bodyweight strength training would be a better complement to martial arts, since the bodyweight stuff lends itself better to martial arts moves (ie - doing handstand pushups can not only help you get the arm/shoulder strength for things like roundoffs, but will get you used to the position, so you don't fear the flips; pushups and burpees are almost identical to the motions required for some evasion/dodge tactics), meaning you can gain in both areas in the limited time a person usually has. "Traditional" weight lifting doesn't have as much crossover, requiring you to spend more time to get yourself to the same functional level than what's required with bodyweight stuff.

Compound lifting directly improved my speed and power in Muay Thai. Just anecdotal, but, there you go.

Compound lifting directly improved my speed and power in Muay Thai. Just anecdotal, but, there you go.

But are you lifting weight to achieve a Mr Universe carpet smuggler look? Because people tell me that my boxing regime is rubbish and it doesn't help you loose weight like "lifting"

I'm not sure what that means. In the end, I'd rather look like Manny Pacquiao than, say, Andy Bolton.
One thing benefits another. Find the synergy, and each benefits the other.

At some point, one has to take preference. Being a great martial artist and also squatting 800lbs regularly are probably mutually exclusive. But there's no reason you couldn't get to the point of squatting 1-2x bodyweight and still being amazing.

Training both takes a real toll on the body too, though. Need lots of rest.