Study for the Treatment of Significant Steatosis With Xenical Followed by Treatment of Hepatitis C With Pegasys/Copegus

Inclusion Criteria: * Participants must be willing to give written informed consent and be able to adhere to dose and visit schedules. * HCV-Ab or HCV-RNA by PCR Positive for at least 6 months * Serum positive for HCV-RNA by PCR assay * Treatment naïve participants who have hepatitis C with genotype 1, 2, 3, or 4 * Body mass index \>27 * Liver biopsy within 12 months with a pathology report confirming the histological diagnosis consistent with CHCand NASH or hepatic steatosis of \>33% * Compensated liver disease with minimum hematological, biochemical, and serologic criteria at the Enrollment Visit (WNL = within normal limits): * Hemoglobin values of \<12 gm/dL for females and \<13 gm/dL for males * WBC \<3,000/ mm3 * Neutrophil count \< 1,500/mm3 * Platelets \<65,000/ mm3 * Direct bilirubin within 20% of ULN * Indirect bilirubin WNL * Albumin \> 3 gm/dL * creatinine \< 20% of ULN * TSH WNL * Alpha fetoprotein value \< 100 ng/mL * Reconfirmation and documentation that sexually active female subjects of childbearing potential are practicing adequate contraception method, or monogamous relationship with a male partner who has had a vasectomy or is using a condom + spermicide) during the treatment period and for six months following the last dose of study medication * Reconfirmation that sexually active male subjects are practicing two acceptable methods of contraception Exclusion Criteria: * Women who are pregnant or breast-feeding * Males whose female partner is pregnant * No other Thiazolidinedione after liver biopsy and/or during the entire study * Hepatitis C of non-genotype 1,2,3 or 4 * Previous anti-viral therapy for treatment of Hepatitis C * Suspected hypersensitivity to interferon, PEG-interferon, ribavirin, Xenical * Any other cause for liver disease other than chronic hepatitis C and NASH or steatosis, including but not limited to: * Hemochromatosis * Alpha-1 antitrypsin deficiency * Co-infection with HBV * Wilson's disease * Autoimmune hepatitis * Alcoholic liver disease * Drug-related liver disease * Any condition that would prevent the subject from having a liver biopsy * Hemoglobinopathies (e.g., Beta Thalassemia) * Evidence of advanced liver disease * Patients with organ transplants other than cornea and hair transplant * Any known preexisting medical condition that could interfere with the subject's participation in and completion of the protocol such as: * Preexisting psychiatric condition, especially severe depression, or a history of severe psychiatric disorder, such as major psychoses, suicidal ideation and/or suicidal attempt are excluded * CNS trauma or preexisting/active seizure disorders uncontrolled with medication * Significant cardiovascular dysfunction within the past 12 months * Poorly controlled diabetes mellitus * Chronic pulmonary disease with documented pulmonary hypertension * Immunologically mediated disease (Crohn's disease, ulcerative colitis), rheumatoid arthritis, idiopathic thrombocytopenia purpura, systemic lupus erythematosus, autoimmune hemolytic anemia, scleroderma, severe psoriasis, clinical cryoglobulinemia with vasculitis * Any medical condition requiring, or likely to require chronic systemic administration of steroids * Evidence of an active or suspected cancer or a history of malignancy where the risk of reoccurrence is ≥ 20% within 2 years * Active clinical gout * Substance abuse * Participants not willing to be counseled/abstain from alcohol * Participants with clinically severe retinal abnormalities * Any other condition that in the opinion of the investigator would make the patient unsuitable for enrollment, or could interfere with the patient participating in and completing the protocol * Known positive HIV * Inability/unwillingness to provide informed consent or abide by the requirements of the study