It's not a silly question at all!! This is actually what I've been trying to do, so I've been scouring the internet for articles, and this is a quick summary of all that I've learned. Well, the best thing to do is to do both cardio and strength training. Cardio burns calories, but strength training can help prevent you from losing muscle while you lose fat. However, you will still need a calorie deficit, and you would probably still lose a little muscle. It's really difficult to gain muscle and burn fat at the same time, unless you experience those 'beginner's gains,' or are very overweight. They are antagonistic processes; muscle building requires calorie surplus, fat burning needs calorie deficit. Remember to eat protein for your muscles, and to drink a lot of water. Also remember, muscle is active, fat is not. That means the more muscle you've got, the more calories you burn just sitting down. I read in Prevention that if you gain 3 pounds of muscle (which can take anywhere from 3 weeks to six months)you burn an extra 100 calories a day!
There are some really great articles out there that can explain this dilemma better than I ever could, so:
There were some good articles on factsaboutfitness and mens-total-fitness. Sorry I couldn't make it a link; my post count isn't high enough, haha.
But Good luck!!!