Weight lifting can be extremely useful in terms of weight loss, or actually, more specifically, FAT loss.
One thing you do need to realize about weight lifting, though, is that it can cause water retention (and actually if you do it right, it should cause water retention because your body retains water while your body heels the muscles you tore during lifting). The heeling process makes you burn even more calories so while you could see a higher number on the scale the next day, you ARE losing fat in the process and it is nothing to freak out about.
What I have found with my own body is that lifting can cause "plateaus" BUT I'm losing inches like crazy during those plateaus. Right now I'm at least a size smaller than I previously was at this same weight. Clothes that used to fit just fine when I was 5lbs lighter years ago are already getting to big for me. I'm still losing weight in the process but I'm also losing inches quicker than I did in the past.
Like Brown said, muscle gain is a SLOW process so a 5lb gain on the scale is not muscle (unless you're on steriods!). However, it certainly can be water weight (the real test is to take you measurements often).
One thing to note, though, is look at what all the top trainers do on TV. The trainers on the Biggest Loser and Heavy are incorporating A LOT of weights in to the contestants exercise routine and they are lifting heavy! Clearly, it works. You don't have to do the same level as them to get good results.
Oh, one other thing. If you want to maximize your calorie burn during exercising due the weights first and do cardio second. You end up burning more calories that way.