well, i must admit that i'm not familiar with this particular bike or the Syncross parts...
but i have to ask what year the bike is? it has cro-moly frame, 7-speed drivetrain and canteliever brakes, no suspension fork even though it looks designed as an off-road bike. my guess is that it was maybe near top-of-the-line in about a 1993/1994, which is VERY old in MTB world where first 'real' MTBs were mass-available in about 1987 or so... MTB technology changes rapidly quickly making a $1500 bike into a $400 bike in 2-3 years - you have high wear and high obsolescence in MTB that you don't get with road bikes... Note: i have a 1989 Stumpjumper with all XT that cost originally something like $1400 (bought it used in '92 for $380), but unless someone wanted it for collector reasons it's not worth much more than $100 now... even though it all still works well (i've also replaced almost all original equipment except for frame)
on 7-speed... 8-speed was been standard in MTBs from 1996 (or earlier) and 9-speed since 2000... while LX and XT are decent, i would hardly call them expensive --- an LX front is something like $40 and an XT rear 7-speed is less than $80 if you can still find 7-speed. my old MTB now commuter is a '97 with 8-speed and i had to replace the drivetrain last fall and had to special-order some of the 8-speed parts. while 7-speed should be just as good, it's obsolete and so isn't worth as much.
anyway, i think it's probably a good bike and would work great for commuting, but unless i'm missing some major hidden value in some of the syncross parts, the price seems WAY over the top... my guess would be it's worth $200-400 (cdn?350-600?) ... so if she already said no to $400, maybe tell her you like the bike but you just don't think it's worth more and tell her to look for more offers and if she doesn't get any then to call you back (don't know how urgently you want it or she wants to sell it)