The real problem with calorie counters on machines isn’t the error in estimation they make based upon some algorithm of work done, but the fact that for reducing fat and/or improving fitness–the goal of most people who track calories expended–has no direct relationship to the calories used during exercise. Many people look at the meter, see that they’ve “burned” 2000 calories (which is only a coarse estimate at best), and then assume that means that will offset any damage done by eating a Double Big Burger with Cheese Fries. The reality is that body composition–the proportions of fat and musculature–are not governed by calories consumed (which are just a measure of energy evailable in a bomb calorimeter) but by the quantity and balance of macronutrients (carbohydrates, proteins, fats) consumed and the basal (resting) metabolic rate (BMR), i.e. the rate at which your body consumes excess calories in the 23+ hours of the day that you are not exercising. Increasing the BMR is like compound interest; even a small bump of rate means a lot more excess calories being consumed over the entire day.
How do you increase your BMR? Just doing some kind of exercise does not inherently increase BMR; you need to actually improve fitness, and in particular, build muscle. I don’t mean bodybuilder-type muscles, as those guys need to consume an enormous amount of calories a day to maintain their musculature, but a good proportion of lean muscle that consumes nutrients and provides storage for glycogen, which both moderates glucose (blood sugar) levels and provides energy for vigorous exercise and activity through the day. The other way to improve BMR is by controlling what you eat; eating a large proportion or amount of carbohydrates which amplifies blood sugar and stimulates insulin response, which mucks up the body’s natural rhythm of storing and using fat reserves.
Running on a treadmill or an elliptical trainer for an hour accomplishes almost none of this, regardless of what calories are consumed, and unless you are spending two or three hours every day doing vigorous exercise, you just can’t burn off enough calories during your exercise period to control weight and fat accumulation. Developing good fitness, eating a well-balanced diet with an amount of carbohydrates with a high glucose index consistent with your level of activity, and maintaining a healthy level of activity throughout the day to get a good BMR (and therefore burn excess blood sugar throughout the day) is the only effective and consistent way to control body weight and composition.