Chantelle, welcome to the boards, it is lovely to see someone who has decided to tackle this problem. I will be less: woohoo go girl you are awesome and rather post a few things that you should take with a grain of salt. Just little thoughts and advice:
1.)I do think you are too low in your cals. I am under 140 pounds and I eat 1500 cals a day (more or less), I am currently losing 2 pounds a week, so it is working. Your metabolic need you can calculate everywhere online but a quick rule of thumb method is to say 10-12 cals per pound, so in your case somewhere in the 2300-2600 area. Then substract 500 from there. So in your case I would try to aim for 1800 ish.
A few reasons why, you will have less cravings if you are truly satisfied therefore have less cheat days, your body will feel more comfortable at that nutrition level (as long as you know you eat a lot of fruit and veg, whole grains, etc...) and you will have wiggle room. As you lose the pounds you need to go adjusting your caloric needs, if you start at 1200 you have no wiggle room whatsoeever as that is the absolute minimum you should ever eat.
Some people start at very low cals and do fine, but some others don't. I am just saying what I think would be best for someone just starting.
2.) Make small changes in your mobility. I mean of course work out, that is great, but you will be healthier faster and lose the weight more quickly if you change small things such as walking a bit more, going up or down some stairs instead of using the elevator, etc... this sounds silly and nobody writes it down in their diaries, but it really jump started me 26 pounds ago (which for mysize is like 20% of my current weight!). I started doing no real physical exercise just walking a tad more, not taking busses or cars for short rides, etc... then I started gymming, now I take classes. Still the class and the gym are great helpers, but my overall more active lifestyle is what is changing me more, I think.
3.) Take time to find your own activity. You don't have to stick to one, you can mix it up, you can go to the gym or run on the beach or in the park, or just walk. Everyone can find their own good activity that does not feel like a chore. I man soem people like to have it as a chore, but I find that a lot of people I know fall of the bandwagon if the exercise feels like a chore. Omega here at the boards lost like 150 pounds just walking. Some other people lost huge amounts lifting weights, or doing home DVDs (there used to be a girl who did a home DVD and had lost like 100 pounds). But for some people those don't work. I tried many different activities and I am now happy with what I do, I don't count minutes until I am done

. It took you a long tome to get to your current weight, it will take some time to get down again, so take the time and make the most of it, have fun while losing weight, otherwise it will be so hard that you need to cheat.
4.) which brings me to this point. You need to change your lifestyle. A diet (be it low GI or atkins or soup or cabbage or any of them) will work short term, then you will go "off" it and gain again. Because think about what it is that made you reach this weight... if you get thinner and go back to what you were doing you will inevitably gain it back. But if you change your lifestyle (and you are young and happily married and have all your life in front of you!) you will not gain it back and gain a whole lot of life. It will be good for your husband too and for your kids if you them some day.
Read the stickies, get knowledgeable about food, about exercise, understand your calories, your needs, and then tackle it knowing what you are doing. Also tackle the problems (if you have them, some people are just bigger and don't have trauma underlying and if that is you, I am very glad) that led you to be this size be it physical ones or mental ones. Do you eat emotionally? Try to channel it in other ways.
Ok, after this small lecture that again you may laugh about and ignore if you fancy (this is your diary and you can do whatever you want in it), I wish you a wonderful sunday and a great week, Camy