A. It can cause you pancreas to work over time, which can lead to type two diabetes.
B. Apparently, fat cells don't need as much insulin to take in sugar, so guess where all the extra sugar goes. Thats right, straight to your hips.
So yes, sugar can make you fat, even if you do exercise a lot. There are two ways to get around insulin resistance. One, obviously, is to consume in moderation. Two, is to eat foods that release the sugar more slowly, so your body has time to deal with it. Some foods, like cookies, crackers, and white bread, start becoming glucose almost as soon as they enter your mouth. Other foods, such as wheat breads, brown rice, and oatmeal, release it more slowly, because the fiber gets in the way some so that sugar can't rush to the blood stream.
On a slightly side note, oatmeal is some amazing stuff. It can actually lower the blood sugar of a diabetic, and is know for all kinds of healthy benefits. Now we know where "healthy as a horse" came from.