That's what I've heard/read too. When I was seriously dieting (I was 50+ pounds overweight), I'd have weeks where I lost 1-2 pounds, then a week when I didn't lose anything. I learned that I had to REALLY work that next week, not to give up. I was usually rewarded with 2-4 pounds lost the next week, a lot of it water.My understanding is that 1-2 lbs per week is about what you can safely lose without causing major disruption.
I've read that you body will replace fat with water, as a "placeholder" while it adjusts to the loss. Then, a few days to a week later, it will shed the water.
I know when I'm shedding water. Oh, my! I need to stay near a bathroom!