how is your control? if you have great numbers and an a1c that's (let's say) below 7%, then gaining weight is the same issue as for anybody. Take a look at your meal plan (or get one) and at 160, moderately active, you probably need at least 2200-2500 calories per day. In order to gain weight, you will most probably need an extra 300-500 calories. If you don't want the extra weight in your gut the additional calories should be a lean mix of carbs-protien and then fats and exercise.
Eating more means you will need to take more insulin - so if you are comfortable with regulating your meds yourself then all's well, otherwise I would get a hold of a CDE (certified diabetes educator) and/or a nutrition person to help you out.
Exercising and muscle building will eventually reduce your basal insulin requirements. It's probably best to go slow, esp when everything is changing.
If your bg numbers are all over the place then you need to concentrate on getting your metabolism under control first, or you will likely just be chasing highs and lows and your body will alternately burn carbs with insulin and then muscle and fats when you are high.