To give you some encouraging numbers- there was a study I read (sorry, can't remember where I found it), where they put "normal weight" women on Atkins for something like a month. The women lost 5 pounds total, but when they looked at body composition, they had lost 7 pounds of fat and gained 2 pounds of muscle. Since your weight isn't very high to start with, this probably applies very well to your situation. I've experienced the same thing (only lost 3 pounds since 1/8, all during the first week, but keep on feeling smaller), and that is what I keep on telling myself.