Of course this diet may help you lose weight in the short-term as a low calorie diet but the results are rarely long-lasting and here's why:
Firstly any very low calorie diets cause a loss of water from the body as the body starts using up the sugar stores in your muscles which are bound with water. This creates an initial weight loss which isn't fat and will therefore be reversed as soon as you up your calorie intake/revert to normal eating.
It encourages an evening binge - there are only 168 calories per bowl of Special K, so unless you snack you'll only have had 336 calories by dinner time which, given I eat at least 1800 calories a day, really is very little. You're therefore likely to be ravenous by dinner time and eat a big meal. This means you'll be eating most of your calories at the end of the day when you're unlikely to burn them off, a sure recipe for weight gain. You should instead be eating most of your calories early in the day to get your metabolism fired up. Infact if you're going to replace any meal with a bowl of cereal as a means to weight loss then it should be your dinner!
If you do eat a nutritionally balanced dinner then you're likely to be eating close to 1000 calories a day on this diet, which is way too little for any adult. Consequently your body will perceive this as starvation to a certain degree and compensate in the long-run by slowing your metabolism and storing an increased percentage of the calories you eat as fat, making it harder and harder to lose weight and keep it off.
Along with 7.5g of sugar per bowl, Special K contains a lot of wheat and dairy, the two most common food allergens. Therefore if you are allergic/intolerant to one of these (something you may not yet realise) you may find it hard to lose weight as your body will respond to the high intake of these foods by retaining more water.
Of course I would always recommend a much more balanced approach to weight loss but there are some positive elements to this approach in that it can help people who graze constantly get back into a routine of regular meals and help them exercise portion control. But if you really want to look and feel special this isn't how I'd go about it!