Definitely seems like something you have to be very careful and disciplined with if you are going to practice. Sounds like it would be easy for someone to half-ass this concept and cause themselves some health issues.
I would not recommend it for someone trying to lose weight. I don't think it should be done until someone reaches a weight they are happy with because it should slow down your metabolism and make weight lose harder to acheive.
But this isn't what the Swedish bodybuilder guy believes, his name is Martin Berkhan. He can be found at http://www.leangains.com/
and apparently he uses it as a weight lose method. I actually discovered him on here on the first page of the thread viewtopic.php?f=6&t=19399
He has low bodyfat and has many success stories/pics from his students on his website, so it is hard to argue with his results. This is assuming that no steroids or similar products are involved, which he states he doesn't use, so I will take him at his word.