Your body cannot physically lose a pound a day. At least not unless you are in some sort of actual starvation scenario, and then you will lose muscle. You are working out too much for the amount of food you are taking in. You should never burn (with exercise) more calories than you are taking in. Your body needs energy (calories) to do things like breathe, make your heart beat, digest the food you are eating, repair cells, etc. As losing_it pointed out, most places say you shouldn't go below 1200 calories. You may lose weight on you current path, but it will be muscle.

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Goal: 140 by my 30th b-day (8/7/07). If I make it, you are all invited to the party!