Wonderwoman,
You need to burn an ADDITIONAL amount of calories through exercise in order for it to count towards your deficit. This means that whatever your average calorie burn is, you'd need to ADD to that in order to create deficit and then reduce your cal intake by whatever is left so here's an example:
Maintenence calories based on moderate exercise: 2000 calories
The average amount of cals you burn per day while exercising moderately: 300 calories
Eating at a 500 cal deficit would be 1500 calories
So you could eat at a 250 cal deficit and burn 550 calories during your daily work outs in order to create the 500 calories deficit to lose the weight.
You could also just eat at less of a deficit and keep your work outs the same. It will just slow down the weight loss but you won't have as many/if any hunger issues.
HTH and didn't confuse you more!:7