The best way to lose weight is by cardiovascular activity (anything that gets your heart rate up, running, cycling, swimming etc.) the longer you exercise the more calories you burn, and shed pounds over your entire body. If you want to lose weight on your legs and tone them without gaining muscle, do leg exercises with a minimal amount of weight, with many repitions.

Does that mean that running is a good thing? I do running most of the time, like as in running / jogging, what is better because im realy disliking the whole muscle leg thing.