Regarding the Keto diet: I was considering doing it, but I more or less resigned myself to a normal diet of simply maintaining a deficit to lose weight through a normal protein/carb/fat spread because it's not necessary for me to retain muscle mass at the moment. However, Ketosis is very effective in neutralizing fats and can help break down body fat percentage quickly while retaining most of your muscle mass (that is, if you have a muscular figure.)
Basically, your body is in a constant state of using sugars from carbs to fuel your system, thus your body does not expend fat cells until there are no more sugars in the bloodstream. This is called "Glycolysis." Ketosis is when your body adapts to using fats before sugars. Essentially, by eating more fats than normal (to enter ketosis, around 65% of your caloric intake should be just fats, 30% protein, 5% carbs, roughly), your body will become fluent in the breaking down of fatty acids and will quickly begin to adjust to the breaking down of fatty acids first before breaking down sugars. This results in the forming of ketones, which is the equivalent of fatty acids being broken down into energy for your body. Ketones will then be used as a primary energy source as opposed to glycogen (sugars from carbs). This results in your body naturally targeting fat cells in your body whenever it needs energy (as opposed to muscle mass, proteins, sugars, etc.), thus body fat is seen to drop substantially and quickly for those in ketosis.
Pretty much everything you would ever need to know about Ketosis can be found here:
http://forum.bodybuilding.com/showthread.php?t=132598293&page=1 . If you have any questions regarding it, I can help you out.