I would not be reluctant to take a exercise class from an overweight instructor as long as he/she knows their stuff! In fact I may be more willing to take a class with him/her and feel more comfortable than if they were thin.
As to the bias, with the more attractive people making more money; never is that as apparent than in serving. I work with some very well-put together people who can pull in that $$ like crazy! Makes me turn green somedays. Of course, being nice looking doesn't guarantee you'll make money if you are a lousy server or have a horrible personality those factor into it too. Personally, I think serving/waitressing have alot in common with being a politician in that you have to charm people and make them like you and trust you. Just my humble opinion, perhaps a little jaded by the fact I don't really like being a waitress.