The suggested rest time according to Arnold Schwarzenegger's New Encyclopedia of Modern Bodybuilding the optimal rest time between sets is about 40 seconds, this allows rotation of the muscle fibers to be broken down giving you optimum build per set. During these 40 seconds your heart rate is slowing down which does almost nothing for your cardio or fat burning.
The best means of burning fat is to keep your heart rate within what's called the Target Heart Rate Range which is between %75 and %85 of your maximum heart rate. Web MD has a nifty calculator. You should always seek a physicians advice before undergoing any exercise regiment.
While running does wonders to keep your heart rate in the fat burning zone it is difficult to sustain. I find that doing a cardio event in between sets keeps my heart rate inside the target range for nearly four times longer than I can when running.
Equally as Important is resting a group properly days after the event, thus avoiding over training more about that later.
