What are the most common fitness myths you hear from clients and friends? Let's debunk them!

This myth IS a persistent little bugger!
Generally, fat loss occurs when more energy is expended than consumed, and insulin levels remain fairly even. It's much more complex than that, but the idea of spot-reduction via targeted exercises is, however unfortunately, untrue.

1) For sure - see Jacquelyn's and my agreement above!
2) Lack of progress can be attributed to diet in a lot of cases. I'd want to know what the client's eating patterns are.
3) Fat decreases and muscle increases, but there's no change of form involved.
4) Exercise is best whenever you can fit it in. The extra sleep could be more beneficial than forcing yourself to get up and exercise.
5) Machines may benefit beginners and/or those working around injuries or other limitations, but free weights involve neuromuscular pathways and stabilizer muscles that machines do not. Along the same lines (no pun intended, really!), machines tend to keep muscles working in the same plane of motion.
6) What about cardio, drills etc and body-weight resistance training? If a client told me this one, I'd tell them to ask someone who's been through military boot camp whether or not it was a "real" workout!

There are 1001+ ways to debunk this one!
My response to someone who tells me this is:
"Tell me what your approach has been".

I used to weigh 280 pounds so this is my favorite to respond too! I always have pictures on hand and show them before and after : ).

(The fallacy of spot-reduction has already been addressed above)

Weight/resistance training done with proper form will build muscle tissue, improve functionality, and help to burn excess fat over the long term. It's nearly impossible for women to become bulky from resistance training; we lack the necessary anabolic hormones (e.g. testosterone) in an amount that would significantly increase muscle size.
An exception is when mass is the goal and the workouts were geared toward very heavy lifts with few repetitions. This may apply to female bodybuilders.
Keep in mind also that female bodybuilders may take anabolic steroids to build more mass than would be possible naturally; that extreme look is neither achievable (nor advisable) for the average woman.