I get the impression that most people don't work out a whole lot during phase 1 since your body may be having some reactions to the dietary change alone (dizziness, for example). I myself passed out at work the first time I did phase 1 - my body was really flabbergasted by the diet! (I fixed that by eating way more snacks - like 2 or 3 between lunch and dinner - so my blood sugar didn't have a chance to get too low).
This time around, though, I am working out every day on Phase 1, and I really think its helping. I focus on clothing fit and feeling slim more so than the scale.