First off congrats on quitting smoking! That is wonderful! Second off welcome to the forum!
I'd much rather lose inches than pounds, the scale is very unreliable especially if you are working out with weights and pushing yourself, which it sounds like you are. Weight is a mental issue and can bear a stigma especially if the numbers are high and not reducing.
The incline on the treadmill is a great bun and hamstring burner as I'm sure you are well aware! LOL!
Did you measure your waist, hips, thighs, arms, and chest before you started? It's a good marker of success especially when the scales don't move. Also keeps you from getting discouraged. You are dropping sizes by the sound of things so you are obviously losing the inches, I think it would be good to get a notebook, or use an excel spreadsheet to track your inches.
What phase are you in for your Atkins Plan? Are you tracking your protein and calories?
www.fitday.com is a good site to track this info and an account is free.
just a piece of advice...be sure you are doing extra quad work (like squats, leg press, and leg extensions, don't be afraid to go heavy your quads can take a lot. I usually do 90-110 pounds on squats and leg press machine, and about 50-75 on leg extensions). You need to balance the extra glute and hamstring burn you are getting on the treadmill, this prevents injury and gives you good symmetry. Most women have weak hamstrings, so you are ahead of the game.
Also how tall are you? If you don't feel comfortable posting this info, please pm me. I think I can help you crack this thing.
Keep up the good work on the exercise! You are doing great!