I'm in the empty stomach camp at the moment BUT I've heard pretty resonable arguments from both sides.
its a weird one. I get the idea - empty stomach = low glycogen levels, so 'moderate' exercise (like powerwalking) will burn the fat without tapping into muscle.
but then would that theory not also apply to post workout when glycogen levels are also low, so modeate exercise after a workout (and before P/Wo shake) would do the same.
dunno, but I'm doing my cardio on an empty stomach just now (well not right this very minute!! ) cant say that I look like I've lost any muscle :?