Well, on the scary side, squats can lead to lower-back problems, spinal compression, torn ligaments in several parts of the body, burst capillaries, blown knees, or compound fractures of the leg. On the other hand, major injuries are rare, and even the minor ones are unlikely with good technique (keeping your knees over your feet and a straight back). And multiple sources say that squats are fine even if you're overweight.
Initially, you'll be doing bodyweight squats, and likely with something to hold onto to ensure proper form and to give you a weigh to bail safely, but you can definitely do squats. As regards losing weight, exercise is good for you, weightlifting will build muscle which burns more energy, and it will help with health issues you may have due to your weight. However, other than a small amount of exercise to kick the body into gear, your primary route of weight loss is going to be decreasing your calories below your Metabolic Base Rate (and only by 400-500 calories per day).