A pound of muscle is much more dense then a pound of fat. As you build muscle you gain weigght. If you are losing fat at the same time, your weight will either go up, stay the same, or go down depending ont he ratio. The density of the muscle means better circulation, as well as a tight sleeker look. The increased circulation means better health, less cellulite, higher metabolism, among other benifits.

There is also a great thread on here, probably under best of, that discusses how weight is lost. When we first lose fat water rushes into the cells as a place marker in case those cells are needed again later. It takes a while for your body to get the hint that those aren't needed, and flushes them along with the water. When this flushing occures people get a "woosh" of either inches, or pounds.

Since your male your body likes putting on muscle. Make sure to get enough protien and calories to support your new activity so muscles build and repair not just get shredded. If you are working out 5 days a week, be sure you aren't working the same body area two days in a row. When you work out you tear apart muscles. It is in the rest period they repair and get stronger. Work upper body one day and lower the next or such. You might look into Body For Life. It is a structured workout program that oculd make things easy.