Relatively untrained indviduals can gain muscle and lose fat at the same time. It's quite possible - this idea that you need to either 'bulk or cut' is the real myth that hurts people IMHO. You get to a point where its very difficult to add muscle without adding fat - but that's far off in most people.
http://www.t-nation.com/free_online_article/sports_body_training_performance/the_carb_cycling_codex
Here is a primer on how to do it. its diet related - of course. Short answer - carbs should be taken before and after your workout to stimulate anabolic growth. But they should be restricted on non workout days to prevent fat growth. This is why for sedentary office workers - and the like low carb is awesome. But I digress..
This is coming from an already developed bodybuilder. Its even easier to do without being trained IMHO.