Should i do distance or time?

Personnally, just like someone above stated, going for a distance is good if you want to keep track of your progress. But still the opposite can be done. You can run for a specific period of time and take note of the distance you did. If I may make a recommandation, I'd say that if you're main objective is to lose fat, then cycling might be a better option. Mainly because like hooahfries said it is highly impactive. Cycling is safer than running. Run if you enjoy it, but for a beginner, alternate with cycling or rowing every other day would be best.

MercNil, in cardio training intensity is not quite speed or time. It is the hearth frequency or rate. Let's say a beginner run next to an advanced one at the same speed. The intensity of the race will be much higher for the beginner. Hearth rate can be estimate manually, by pressing two fingers on your wrist for 15 seconds, then multiplying this number by 4 in order to get your value of BPM (beat per minute). However, the best option is probably one of those watch that comes with a belt you put around in chest. That is a precise method.

To the OP, let me give you the method I use to keep track of my progress. First, you choose a distance, a speed, and a time you are confortable with on the treadmill. The numbers don't really matter. Now, you keep track of your heart rate during the race. Write down this value and when you'll run again next time, you'll know precisely if you're improving or not. A lower heart rate for the same exercise is a sign of improvement. The fact that the speed, distance and time are the same each time ensure that the condition of the test are always the same and do not interfere with your BPM. I do not keep track of my heart rate every single workout, in fact I do this twice a month. This is just to see if i'm training correctly. During the others workouts, speed, time and distance can vary, you'll still make progress.

Anyway, if your goal is to lose fat, don't bother with this technique   just run... and stretch after... your next workout will be easier

I agree with hoooahfries and ragingbill. Running same distances and comparing your passing times is much more motivating than running X minutes. As far as losing weight, just doing any physical activity helps you lose it, as long as you don't overdo your calories.