Trek 1.1 or Trek Lexa?

The two bikes are roughly equivalent in terms of component level and build.  The Lexa however is a womens specific design where the 1.1 is not.  The Womens specific design is more comfortable for most but definitely not all women.  In terms of these two bikes, go with what feels best.

The one recommendation I would have is to upgrade to the Lexa S or 1.2 if they are available.  They are both still inside of your $1000 price range at full list according to Trek's website.  This upgrade gets you a carbon fork that absorbs bumps better and 9 speed vs 8 speed components for more gear options.

Finally, given the option and unless you live in a very hilly area, go with a compact crank instead of a triple.  You do not loose much in terms of gearing, but you do get much better shifting front and rear from the easier angles on the chain.

My wife just bought her first bike and got a 2012 Lexa for $499.  I've taken it for a spin and it's a nice ride.  She loves it! (We looked at a 1.1, too, but she liked the color of the Lexa better)

If they are older models, I assume it's not just a Lexa C they're selling for $699?  Trek 1.1 or Lexa C new on the Trek website are $669.

That said I agree with the other posters that the next level up (looks like a Lexa S) will be better in the long run- carbon fork and actual Shimano components.  There are lots of threads that will tell you to go for nothing less than Shimano 105, but FWIW I've had a road bike with Tiagra and a road bike with 105 and didn't really have a problem with either.  

Some people hate the shifters on Sora but honestly if you're moving up from a mountain bike, and not putting 500 miles a month on your bike, I think they'll be fine.  

Ride the Lexa and the unisex model and see which feels better.  FWIW I'm bike shopping now and really looking at WSDs.  I think I fit them better but I really like the more ergonomic handlebars and shifters that come on most WSD frames.

Another thing to think about is whether you want a compact crank or a triple- the Lexas come with either.  If you live/ race where it's really flat, go for a compact crank.  If not, there are tons of threads debating the merits of triples- read them and decide for yourself!