After my first pregnancy, I believed the "9 months to gain and 9 months to lose," and that nursing was all I needed to do to lose the weight. I have a 2 year old and a 5 month old, and since that didn't work the first time, I knew I needed to work hard after I had my second son to lose the weight. I'm also hoping to have a third child, so I'm trying to get this excess weight off now before I compound it
I do believe that nursing burns calories - but I think it also makes your body crave more food. Or perhaps that's just because I always crave food

For me, calorie counting and exercise are making a difference in reducing my cravings and losing weight.
I know that when I was fit I burned 2270 calories/day. (High tech eval done at a gym.) So, I have a spreadsheet where I've used a few other data points to give myself a calorie range so I can make goals and set my expectations. (I obsess a little when I'm dieting, and my spreadsheet makes me happy

.) I don't think I'm burning 500-700 calories a day with nursing, I think for me it's more like 300. So I give myself a goal, like 2 lbs lost per week, which is supposed to be safe while nursing. That's 7000 calories, or a deficit of 1000 calories a day. I take 2270, subtract 1000 and have 1270. I add 300 back in for nursing, which puts me at 1570. Then I add back in whatever exercise I do for the day, using either an online calorie expenditure calculator or my heart rate monitor watch. Say I burn 300 calories with a long stroller walk. That gives me 1870 calories I can eat that day. If I don't feel like exercising I just cut back on the food. (Which is not too fun, so it gets me out for a walk more often than not!)
I also do workout dvds at home if I can get the boys to nap at the same time, or when they're in bed for the night. I'm doing Jari Love for weights, because I know that adding more muscle to my body will burn more calories, allowing me to eat more.
I've found that I need to add in some snacks to avoid bingeing on goldfish or whatever else my toddler is eating. I try to eat every 3 to 4 hours, eating fruit, veggies and yogurt as regular snacks. I eat frozen meals for lunch - Lean Cuisine, Weight Watchers, South Beach, whatever's on sale - so I have controlled portions. And, I save some calories for dessert, because going without makes me feel deprived, so I cheat. I like skinny cows and Trader Joe's small dark chocolate bars.
Slow and steady is the key - though that's horribly frustrating at times! My 5 month old weighed in at 19.5 lbs at his 4 month check up, so I'm positive that the working out and counting my calories isn't reducing my milk supply.
I wish good luck to you and to the rest of us!