This is something I've been thinking about a lot lately. Mostly because I'm again hitting that point where, while my body fat percentage is going down, my weight is going up. I realize that the weight will eventually drop again, and that the weight gain is muscle mass, and is therefore a good thing. It is still frustrating, however, to see the numbers on the scale doing exactly the opposite of what you want them to do.
One very annoying aspect of this phenomenon is that the most widely used system of determining your level of general fitness uses your weight and height to do it's calculations. Body Fat percentage is a much better factor to determining fitness, yet, because it's not as easy to measure as weight, most people resort to using your BMI.
It's very frustrating for someone working very hard, seeing strength improvements and endurance improvements, to be told they are "worse off" than a week ago.
Ahh well. Until the weight loss catches up to the muscle gain, I suppose I'll just have to deal with my shiny new Wii Fit trying to console me about my weight gain by telling me "It will take some time for the results to show from your hard work!"
Do you track your Weight or your Body Fat Percentage?