I'm sure some "experts" will fill in the details or correct me, but I think to a great extent excess protein is simply pissed away.
One of a dangers of a low carbohydrate diet is reduced mental capacity. I believe your brain needs carbs, it doesn't have the ability to convent fats and proteins into usuable energy sources. Moodiness, short term memory loss, etc. are common side effects of a diet deficient in carbs.
Supposedly protein leaves you feeling "full" longer, so you tend to eat less without feeling hungary all the time - this would tend to make losing weight easier. Most Americans are protein deficient and consume ungodly amounts of carbs and fats. I am no expert, but I think the protein diets simply go to the other extreme and can be unsafe/unhealthy.