Well, if you are running, I think it will shed that fat, but make you look even skinnier in clothes. I think you should lift weights. It does reduce you body fat %, and also gives you some nice muscles, and gives you that lean fit and toned look. Maybe try doing crunches with a medicine ball, and make sure you're doing them correctly, otherwise you won't get much results.

My friend used to be a little chubby. Not really like you can see his fat, but he wasn't very lean. I think he was about.. 15% body fat, and then when he started lifitng, and now he looks really great, he's around 11% right now, and he's got some nice biceps, and is looking a lot leaner.