I found myself thinking about this thread this weekend, but couldn't comment back on it, because I was in Tucson riding EL TOUR! Good times.
Anyway - yes. You are very correct. It's not realistic in the sense that normal people don't have these kinds of results. The truth is - all these contestants DO is workout. For much more than 4 hours a day. It's all they have to do. When they're not filming workouts or weigh-ins... they're... well - working out. I understand they have doctors maintain their diets, and so there are no "starvation" methods going on. In fact, they eat many more calories than they do once they go home - because of their heavy workout routines. They eat as if they're training for endurance events.
One of the reasons they lose such large amounts - especially at the beginning - is because they are SO HEAVY. I mean - I'd love to lose 20 pounds... but it takes CRAZY effort on my part to do so. However, when you are carrying around 200 pound extra - 20 pounds comes off fairly easy with a little bit of exercise and nutrition. As you get lower, the numbers get stickier.
So is it realistic in the sense that the results of this show could happen just as quickly to your at-home-joe/joanne? No. Is it realistic in the sense that it is not a "faked' reality show? Absolutely. This is as real as they come. The interesting part is - now these kids have to go home... what happens then. As you've all mentioned - what is the formula not only for taking it off - but keeping it off? This will be the ultimate test for these guys... when the cameras are off of them.
Anyway - thank you for indulging me. I work in the television industry, and as I mentioned - have close friends who work for this show - so I'm always intrigued by audience response - good and bad.
You ladies rock... and you inspire me!

