I'm considering buying one for indoor weight loss.

It's worked for me. I follow the plan in The Beginning Runner's Handbook, which can be purchased from any book store and Amazon.com. It helps you through the transition from being a walker to being able to run for 60 min non-stop! I've already lost 10lbs, and I'm not even halfway through the 13-week program.

Yes. Treadmills are probably the best option in terms of cardio equipment. Use it consistently and vary the workout program so you don't get bored with it.
Use interval training to increase the intensity. (1 min easy/1 min hard etc)
Personally, I would never purchase one though. I feel they are way overpriced. You could get a gym membership for less money and get access to every piece of equipment including their treadmills.
If you can't get a gym membership I would just run outside.
Thats just my 2 cents...
Kaushal
http://www.bestmuscleprograms.com

It can be very effective if you use it properly. Make sure you jog and not just walk on it and increase your intensity by going up in speed and increasing the incline.
http://homeworkoutroutine.blogspot.com/