If you want the specifics, you need to lose roughly 500kcal a day to lose a pound a week. By lose 500kcal, I mean that you have to burn 500kcals more than you eat. However, don't go trying to burn off 2,500kcal on the treadmill, because everything you do in your day, even lying down, burns calories. So that is why I suggest that an hour ever day is more than enough to keep you in very good shape or to lose weight.
When it comes to too much exercise, I would say that if it gets to the point where your joints are aching or you are feeling faint or light-headed, it is time to stop. It is not advisable to regularly completely wear yourself out. I would say that three hours a day of proper exercise is too much for the average person and could be causing permanent damage to joints etc.
The good thing about exercise also, is that it helps stem your appetite and keep you satisfied, so this creates a healthy cycle, where you will begin to tone up and lose excess fat.
Also check out my hub if you want anymore advice on becoming more physically fit.
Hope this helps!