I'm not a doctor (no, not even on TV), but have enough personal experience and did some research over the years in this area.
the body runs on carbohydrates (or 'Drades, as I call em). the body stores carbohydrates in the form of glucogen in the muscle and liver. stored glocogen is what we use as fuel for the muscles. A normal person has enough glucogen for 2-3 hours of cycling and if we continue to ride when we are out of clucogen we will bonk.
If we do not consume carbohydrates, the body can make glucogen by breaking up fat in the liver and converting it to a form of glucose, however this is an inefficient process and it is slow. Too slow to provide enough glucose to continue to ride hard which burns glucose faster then the liver can make it from fat..
so the answer is yes, we burn fat when we ride, but we burn more fat after we done riding, when the body if converting fat to glucose in order to replenish the glucogen stores.. Athletes such as TdF riders need to carbo-load between days of riding because the body doesn't have enough time to replenish enough glucogen over night just from fat alone, and a rider must eat a lot of carbohydrates to replenish the glucogen stores..
I have been on a low carb diet for 3 years, lost 105lb and while on low carb diet I was lifting weights and riding bike. There is no way I could ride (real riding, not putting around town) more then 2 hours without eating carbs.. But if I am mindful about carbs for the day or two after a hard ride, I will lose 1-2 pound of fat just by resting..
It take longer to recover between hard rides on a low carb diet, but hey, I rather lose more weight then ride every day (for now)....
(Edit: crabs??
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