I'm at the end of my seventh week of Atkins and after the initial massive losses [17lbs in first two weeks] my weekly reduction is currently averaging around 3lbs.

Age: 32
Height: 6'4"
Current weight: 295
Body Fat %tage: 18.54 [according to mybodycomp.com] - I'm suspicious of these results.

I'm exercising 6-7 days a week for 45 mins on a dual action cross trainer; 80-85% of max heart rate. I'm also weight training for a similar period twice a week and working my stomach muscles for 20 mins every morning [or until I can't handle the cramping anymore]. As my appetite has shrunk as a result of this WOE, my intake is down to around 2000 cals which sates me perfectly [no hunger pangs, no cravings]. I'm also setting world records for water cosumption; > 6 litres a day, everyday.

I'm intrigued as to the possibility of having gained lean body mass as a result of this training regime which is offsetting my overall weight loss week on week. Although I'm doubtfull that LBM increases would show in such a relatively short time frame.

I'd be most grateful for any advice.

take measurements - either fat calipers or just tape measure for several sites and track those - you don't really even have to calc the BF% to use calipers - just track the changes/downward trends.
If you are using mybodycomp.com then you should be already familiar with taking measurements with the tape - just track those changes - but be very specific to measure the same spot each time - if you do biceps 1/2 way from elbow to shoulder - measure how far that is from your elbow crease so you can do it the same the next time.

I wouldnt be surprised if you are retaining a lot of water actually. It is quite possible that you could have gained lean mass and lost fat at the same time if you are new to exercising. But water weight is more likely the cause.
When I took up walking (seriously like 8.6 mile trips) and weight training, I kept gaining weight. And then I cut down my sodium and bam! it all flushed out. About 6 pounds of water.

Thanks very much for the responses. I've just taken a new set of measurements after four weeks .. so hopefully they'll be telling me something useful. I too was concerned with the possibility of retained water, so I stopped eating the processed meats a few weeks back and have removed all traces of sodium. But then medical advice seems to say "drink water to remove retained water" .. so it's all a trifle confusing. :?

Yes you definately need to drink water to flush out water. It seems counteractive, but its the truth.
And when weight lifting the muscles actually hold water in their cells.
Anyway 3 lbs a week is still a very large loss of weight. Take it slow, ok? And good job thus far. Amazing really.