Fats are the most precious energy reserve in the body. This is due to the fact that it has the highest energy (or caloric) value. A gram of fat when ignited is more explosive and releases more energy than carbohydrates of muscle. Anyone who cooks knows that you can burn a steak (muscle) or sugar, but if you expose fat to flame it explodes. Precisely speaking, one gram of fat will combust and result in 9 ‘calories' of heat given off. An equal amount of carbohydrate will only give off 4 ‘calories' of heat, and protein will give off only two. Aside for being more efficient in energy generation, fat is stored on the body without water, so it does not weigh that much. So a human can have more energy stores and carry less weight with fat than with any other source of energy.
The interesting thing about fat is that the body can actually build fat out of excessive consumption of carbohydrates or protein. Once carbohydrates or protein are converted to fat, they can not be converted back. So it can be very difficult to loose the fat once it is stored. This is why some ‘non fat' diets are not effective. If you eat too much protein or carbohydrate, they will fill the reserves initially and then the body will convert the extra calories into fat!
There are only two fatty acids that the body can not make and these must be ingested to maintain these essential fatty acids. All other fatty acids can be created from other types of food. The minimum fat intake is that which provides the daily requirements of the essential fatty acids; it only takes 2 to 4% of the daily caloric intake as linoleic acid (an essential fatty acid) to meet this requirement.
Because fat is such a precious energy reserve, the body will preferentially burn up all its carbohydrate reserves before it will initiate any significant breakdown of the fat reserves. This is why limited exercise does not achieve significant fat loss. Exercise has to be maintained for a long enough period of time to burn up all the other energy reserves before you start to loose fat at a significant rate. So as the carbohydrate (glycogen) reserves start to run low with exercise, the fat burning mechanisms kick in and it is the carbohydrates that fuel the burning of the fat. In essence, fat burns in the flames of the carbohydrates reserves, but only as a last resort.
High fat diets may be problematic because you are ingesting additional nutrients and fatty acids components which have been shown to be unhealthy in high levels in the blood. Advocates of higher fat diets may be promoting the concept that the body does have a mechanism to burn the fat to maintain energy levels for the ‘typically' glucose dependent cells and tissues. The mechanism biochemically speaking mimics the effects caused in starvation where the body goes into a starvation or ‘ketosis state'. These ketones can be recognized by the glucose dependent cells and over a period of a few weeks, the body will use these ketones to feed the typically sugar dependent cells. This biochemical conversion towards a ketosis state will indeed cause weight loss, but one of the by products is that the body will burn its carbohydrates and muscle mass to drive the ‘engine' that generates the ketones. So you will loose weight by breaking down the muscle, if you do not eat enough nutrients to keep the fat burning mechanisms going. Since muscle is stored with lots of water around it, when you loose muscle you also drop water weight.