First, there's no such thing as "tone" but not gain muscle mass. You can only build muscle, maintain muscle or lose muscle. There are no other options.
You either maintain the muscle mass you do have while losing weight by getting adequate protein 10-35% of your daily intake. ***Protein supplements are unnecessary*** If you eat a healthy and balanced diet you should have no issues getting enough protein and strength training 2-3x a week. If you don't, when you lose weight... not only will you lose fat but lean muscle and tissue as well. If you lose enough fat, you may be able to see you're already existing muscles at your goal weight. You are not likely to gain any muscle while losing weight because you need to gain weight to really build muscle but you will want to try to maintain what you do have to keep your metabolism from slowing.
Or you gain muscle while eating enough calories to support muscle growth. However, this doesn't lead to women becoming bulky. This leads to women becaming lean. Muscle is dense and takes up less room than fat per pound. Fat is bulky. So the trick to being lean (or toned) is to cut fat and build muscle. First you work on losing weight and maintaining the muscle mass you already have and then you eat enough calories to build muscle at your goal weight.
You *want* to build muscle if you want to look toned. Looking toned is combination of higher LBM (lean body mass) vs. lower body fat %.
You may find this article helpful:
http://www.answerfitness.com/82/fat-calculate-body-fat-percentage-answer-fitness/
Personally, I worked on losing fat and building muscle to become toned. I gained muscle mass and lost fat. It didn't make me bulky at all. Infact, it made me smaller at a higher weight. I now wear a size 1 @ 115 lbs (before I gained weight from my pregnancies) I used to wear a size 4 at 110 lbs.
