The trick, of course is to add muscle, not fat. So eat more, but keep your intake of protien and complex carbs high, while cutting out simple carbs. You diet should consist primarily of high protien sources (milk, eggs, meat, nuts, cheese, etc.) and fresh raw vegetables and fruits.
Exercise wise I have tried a lot of routines and had the best results with mostly short, moderate repetition workouts. Lower reps are extremely hard on your joints and connective tissue. For best long term results generally keep the repetitions in the 12-15 range for most exercises, doing only 2-4 sets per body part per session, and working each body part 2-3 times per week. Once a week I do a set or two of 6-8 reps for each body part, on one compound exercise, just to guage my strength. Try to do different exercises each session of the week. For example for chest you might do:
Session I: Flat bench press 1 set of 25-30 reps, 12, 6-8, 6-8
Session II: Flat Bench Press: 1 set of 25-30 reps
Incline bench press 15,12,12
Lying Flyes 12,12
Session III: Flat Bench Press: 1 set of 25-30 reps
Smith Machine Bench Press: 12,12
Incline Dumbell Press: 12,12
Try to add 5 pounds every week to each set. If you don't make the desired reps drop back the next week and then try to add again the following week. Your entire workout should only last 40-60 minutes. Cardio should be done 1 or twice a week, 20-30 minutes on the stairmaster, or a 3-4 mile run (should take 20-30 minutes). Do the cardio on a day you don't lift and take at least on day a week completely off.
Hope this helps.